Inventory Report Boosts Oil

Crude gains 68 cents to $68.45 a barrel.
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Crude oil futures climbed on Wednesday after the U.S. Energy Information Administration released new petroleum inventory figures that were seen as bullish by analysts and traders.

August light sweet crude gained 68 cents to $68.45 a barrel on the New York Mercantile Exchange, and reformulated gasoline was 2 cents higher at $2.26 a gallon. Heating oil advanced 5 cents to $2.04 a gallon, while natural gas rose 2 cents to $6.85 per million British thermal units.

The EIA's inventory figures for gasoline and distillates caught many market watchers by surprise. Gasoline inventories fell 750,000 barrels during the week ended June 22. Analysts were expecting a 1-million-barrel increase in gasoline stores.

Distillate inventories fell by 2.3 million barrels, whereas analysts had predicted a 550,000 barrel injection. Crude oil inventories grew by 1.6 million barrels, which was in line with expectations. Refinery utilization rose 1.8 percentage points to 89.4%.

"The whole energy complex rallied when the large draw on gasoline stores was reported," says Brandon DiTullio, commodities broker at Nextsource Trading Corp. "It suggests that refineries will need to continue to focus on building gasoline inventories this summer. This will increase demand for crude oil and could ultimately delay the production of heating oil ahead of next winter."

Meanwhile, most energy stocks piggybacked on the strength in commodity markets.

ConocoPhillips

(COP) - Get Report

jumped 1.6% to $76.98.

Chevron

(CVX) - Get Report

rose 0.9% to $83.42, and

Exxon Mobil

(XOM) - Get Report

gained nearly 1% to $82.58.

Elsewhere, Citigroup downgraded three major refinery stocks.

Sunoco

(SUN) - Get Report

was changed to hold from buy, sending its stock 2.7% lower to $78.18.

Valero

(VLO) - Get Report

was dropped to sell from hold, reducing its stock 2% to $73.20.

Tesoro

(TSO)

was also downgraded to sell from hold, dropping its stock 3.9% to $55.63.