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Crude Supplies Rise, but Distillates Fall

Crude oil stockpiles rose much higher than expected but distillate supplies surprised with a better-than-projected decline.
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) -- A larger-than-expected decrease in distillates supplies helped offset a spike in crude oil inventories during the week ended Feb. 12 as energy prices settled broadly higher on Thursday.

Natural gas was the exception, with the March delivery contract dropping 21 cents, or 4%, to finish the session at $5.17 per million British thermal units. The dip came despite a withdrawal of 190 billion cubic feet to natural gas storage levels last week, as reported by the Energy Information Administration during the morning session. The withdrawal was in line with the 188 billion to 192 billion cubic feet decline that analysts polled by Platts had been expecting.

Still, the report showed underground storage in the lower 48 states remained 1.3% higher than year-ago levels and 2.7% above the five-year average.

The contract also has been pressured by recent weather reports showing that temperatures won't be as cold as originally forecast, according to Barclays Capital analyst Michael Zenker.

Thursday also brought weekly EIA figures for crude oil and fuel inventories, which had been delayed because of Monday's Presidents Day holiday. According to the report, crude stockpiles swelled by 3.1 million barrels for the week ended Feb. 12, far outpacing the 1.65 million barrel build that was projected by analysts polled by Platts.

Crude oil for March delivery finished ahead, adding $1.73, or 2.2%, to settle at $79.06 a barrel.

Distillates fell by a better-than-expected 2.9 million barrels. Analysts had been anticipating a 1.6 million-barrel drawdown.

Gasoline stocks rose by 1.7 million barrels last week, which was more or less in line with forecasts for a 1.5 million barrel advance.

Jeff Mower, chief editor of the Platts Oilgram Price Report, noted that last week's gasoline demand of 8.52 million barrels per day was the lowest since Jan. 30, 2004.

"A 245,000 barrels per day week-on-week drop can largely be attributed to curtailed driving activity resulting from mid-Atlantic winter storms over the past two weeks, and thus can be seen as short-lived. But even prior to the storms, gasoline demand was looking anemic," Mower said.

"Considering that refiners are still running well below capacity, at 79.8% last week, gasoline output can easily climb if demand recovers substantially."

March reformulated gasoline gained 6 cents, or 3.1%, to settle at nearly $2.07 a gallon, as March heating oil added 5 cents, or 2.2%, to settle at $2.05 a gallon.

A mix of economic reports helped lift stocks as investors appeared to pay more heed to an upbeat signal on

Philadelphia-area manufacturing, though separate reads on

initial jobless claims and

wholesale inflation failed to impress.


U.S. Oil Fund

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ETF finished ahead by 75 cents, or 2%, at $38.72, while the

U.S. Natural Gas Fund

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shed 30 cents, or 3.1%, to close at $9.41.

Energy stocks traded broadly higher with the NYSE Arca Oil Index and Philadelphia Oil Services Sector Index gaining 0.7% and 0.9%, respectively.

Exxon Mobil

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finished the session up by 20 cents, or 0.3%, at $65.96, and


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was among the Dow's best performing stocks, rising 1.1%, to close at $73.62.

In morning earnings news,

Noble Energy

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missed fourth-quarter profit forecasts, while


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posted earnings in line with expectations. Nobel Energy shares fell 1.5%, to $75.33, and Apache's stock ticked up 0.02%, to $103.59.

Chesapeake Energy

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, which said it narrowed its fourth-quarter loss late Wednesday. Its stock soared 4.2%, adding $1.10, to close at $27.46.

-- Written by Sung Moss and Melinda Peer in New York