Crude oil futures were up nearly $6 a barrel in recent trading Wednesday following reports that U.S. crude oil inventories fell 3 million barrels more than analysts expected -- by 4.6 million -- during the week ending June 6.
Oil futures surged $5.75 to a $137.06 a barrel in recent Nymex trading. Trading in both West Texas light crude and Brent crude futures has been very volatile since the Energy Information Administration released its data, with near-term WTI moving wildly between $137 a barrel and $133.40 a barrel.
Finished gasoline inventories rose 1 million barrels during the week and distillate inventories grew by 2.3 million barrels. These figures were in line with analyst forecasts.
Petroleum product futures are also partaking in Wednesday's bull market at the Nymex. Reformulated gasoline is up 17 cents at $3.49 a gallon, heating oil is 14 cents higher at $3.95 a gallon, and natural gas is gaining 24 cents at $12.68 per million British thermal units.
Although crude stocks are now in the lower end of their average range for this time of year after falling for the fourth week in a row, the juxtaposing builds in petroleum product stockpiles appear to diminish the likelihood that the U.S. is facing a supply crunch ahead of this summer's driving season, according to Jim Williams, energy economist at WTRG Economics.
"Oil inventories are a little lower than normal, we actually have 8.5 million more barrels of gasoline in storage than we did last year," Williams said. "It is true that stores for the broader distillates category is a little low, but diesel fuel is the only distillate that really matters at this time of year, and our stocks of diesel are basically in line with there they were last year, and are at a comfortable level."
Addressing the media chatter about possible gasoline shortages this summer, Williams said, "We have plenty of gasoline to make it through the summer last year, and we should easily make it through this summer also."
Also moving energy markets Wednesday was new economic data showing that China imported 12.7% more oil in the first five months of 2008 than it did last year.
More worrying was a report appearing in the latest issue of the
Review of World Energy. The comprehensive report says that global oil production fell for the first time in five years in 2007 -- at the same time that oil prices reached all-time record highs.
Some are saying that the 2007 production figures support the hypothesis that global oil production has peaked. Others argue that major producers no longer have any economic incentive to produce more oil, because any increase in output rates would likely weigh on the price of crude.
Elsewhere, oil stocks were largely moving higher.
is gaining 2% at $69.91,
is up 1.5% at $94.26,
Royal Dutch Shell
is getting a 1.8% boost to $82.92, and
is up 0.8% at $88.61 a share.
The day's performance for oil service stocks has been a little more mixed.
was recently losing 0.56% at $49.40, while
was up 3.2% at $45.31.
U.S. Oil Fund ETF
, which closely tracks the performance of WTI futures contracts on the Nymex, are 4% higher at $111.38.