Crude Surges Toward $76 - TheStreet

Crude Surges Toward $76

Natural gas adds 12 cents to $6.65 per million British thermal units.
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Oil futures struggled to find a direction and swung across a wide price range during Thursday's trading session at the New York Mercantile Exchange.

Late in the day, crude was up 87 cents at $75.92 a barrel. Reformulated gasoline fell 3 cents to $2.17 a gallon. Heating oil remained unchanged at $2.10 a gallon.

Near-term natural gas climbed 12 cents to $6.65 per million British thermal units.

After Wednesday's market close, technical matters related to Friday's termination of the August West Texas intermediate crude contract vied for dominance with the surprise report by the Energy Information Administration that gasoline stores fell dramatically during the previous week.

WTI finished just above $75, but spiked up 75 cents in after-hours trading. However, when traders returned to the Nymex crude pit on Thursday, they quickly sold August WTI back down below the $75 level.

At that point though, crude began to rebound, reaching as high as $75.87, a level not seen since August 2006.

September will supplant August as the near-term crude contract after the end of trading Friday, and traders were likely closing out their positions ahead of the change.

Crude oil's persistent strength is due to continuing worries over tight supplies, according to Stephen Schork, principal of the Schork Group, in a research note.

"As peak gasoline season moves along, the integrity of U.S. downstream capacity remains in serious doubt," he said. "Bottom line, there is no doubt supplies will remain tight through the remainder of the summer. What's more, as the driving season winds down, peak hurricane season winds up. Without a sufficient cushion of supply, the NYMEX products, particularity heating oil, will likely remain on edge through the end of the third quarter."

Meanwhile, energy stocks mostly moved higher. The CBOE Oil Index climbed 0.45% to 818.57.

Exxon Mobil

(XOM) - Get Report

advanced 1.6% to $92.61, while

ConocoPhillips

(COP) - Get Report

rose 0.76% to $88.09.

Oil-services firm

Noble

(NE) - Get Report

reported that it earned $2.16 a share in the second quarter, a 66% increase over the same period a year ago. The news lifted shares of Noble 3.1% to $103.51.

Among stock ratings changes,

Sempra Energy

(SRE) - Get Report

was upgraded by Wachovia to outperform from market perform, boosting its stock 2.6% to $59.40.

Western Refining

(WNR)

was downgraded by Credit Suisse to underperform from neutral, sending its stock 6.1% lower to $57.86.