Updated from 12:26 p.m. EDT
Oil prices rose Wednesday as traders fretted that gasoline supplies would be pressured during the peak summer driving season in the U.S.
Light, sweet crude for August delivery jumped 27 cents to $72.19 a barrel, while wholesale gasoline tacked on 1 cent to $2.21 a gallon.
Gasoline supplies dipped for the first time in two months last week, according to the Energy Department's weekly petroleum report. Inventories dropped by 1 million barrels to 212.4 million barrels as production and imports fell. A modest rise of 450,000 barrels was predicted in a
Bloomberg
poll of analysts.
The closing of a key shipping channel in Louisiana also underpinned energy prices and reduced output from three refineries, one of which is the fourth-largest in the country. On Wednesday, the U.S. Energy Department granted Citgo and
ConocoPhillips
(COP) - Get Report
emergency loans of 750,000 barrels from the national Strategic Petroleum Reserve to offset their diminishing supplies. The channel isn't expected to open for two to four days,
Reuters
reported.
The supply disruptions are particularly worrisome to traders because they come before the July 4th holiday weekend, when millions of Americans take to the roads. Despite higher gasoline prices, consumption has risen 0.9% to an average of 9.4 million barrels a day over the past four weeks.
As the summer progresses, gasoline inventories are expected to continue falling. They're currently 1.7% below last year. Stockpiles of crude, which is refined into gasoline and other petroleum products, dropped by 3.4 million barrels in the Energy Department report, double analysts' expectations, to 343.7 million barrels as imports declined. Oil inventories are 4% above last year.
Supplies of distillates, which include jet fuel and heating oil, climbed by 1.8 million barrels to 126.3 million barrels. Low demand has boosted inventories 8% over last year. Heating oil fell 2 cents to $1.93 a gallon.
Despite a forecast for mild temperatures over the next two weeks in the Northeast, natural gas prices inched down by 16 cents to $6.15 per million British thermal units.
Stronger energy prices boosted shares of oil and natural gas companies on Wednesday, with the Amex Oil and Natural Gas indices up 1%.
Hess
(HES) - Get Report
,
Occidental Petroleum
(OXY) - Get Report
,
ExxonMobil
(XOM) - Get Report
and
Chevron
(CVX) - Get Report
were posting the largest increases, up 2% to 4%, on the Amex Oil index.
Shares of Hess were gaining ground after Merrill Lynch upgraded the company from neutral to buy, citing higher oil prices.
Among natural gas producers,
Apache Energy
(APA) - Get Report
,
Questar
(STR)
and
Noble Energy
(NBL) - Get Report
were adding 2% to 3% each.
