Energy futures were mixed on Wednesday as traders switched their focus away from geopolitical issues and toward domestic inventory and supply concerns.
The May light sweet crude contract rose 12 cents to $62.01 a barrel, while natural gas was down 1 cent at $7.86 per million British thermal units.
Gasoline added 3 cents to $2.15 a gallon, after touching an eight-month high above $2.17 a gallon earlier. Heating oil gained 1 cent to $1.87 a gallon.
The moves came after the Energy Information Administration released new petroleum inventory figures that were extremely bullish for gasoline supplies.
For the week ended April 6, crude inventories rose by 700,000 barrels, whereas analysts at Barclays Research were expecting a 2.4 million barrel injection. Gasoline inventories fell by 5.5 million barrels, as opposed to an expected 1.3 million barrel decline. Refinery utilization rates rose by more than 1% over the previous week.
"Today's EIA figures reiterate that there is very strong demand in the gasoline market," according to Thomas Hartman, energy analyst at Altavest Worldwide Trading. "There are definitely concerns over whether we will have adequate gasoline supplies when the summer driving season peaks in midsummer."
"If we don't start seeing inventory builds instead of withdrawals soon, we will likely have gasoline shortages this summer," Hartman said.
Spreads between crude oil and gasoline, known as "crack spreads," are currently near $27 a barrel, which is abnormally high. "As refinery utilization grows, the crude overhang will start to get eaten up. This will lift crude prices and reduce gasoline prices," Hartman said.
Crude prices are currently supported at the bottom end near $60, and will likely rise into the high $60s as crack spreads normalize, he believes.
Meanwhile, energy stocks were mostly lower. The CBOE Oil Index slipped 0.2% to 668.62.
finished the day fractionally lower.
In a surprising move for the energy industry,
announced that it will join a growing chorus of activist groups, known collectively as the U.S. Climate Action Partnership, that supports a federal greenhouse gas emissions cap.
Analysts believe that by participating in the partnership, Conoco could play an important role in deciding how future environmental legislation will be written. Shares of Conoco fell 0.3% to $69.23.
Among stock upgrades,
Aventine Renewable Energy
was lifted by Soleil to buy from hold, boosting its shares 0.3% to $20.11.
On the other side,
rating was reduced by Bear Stearns to underperform from peer perform. Western's shares fell 7.6% to $34.97.
was downgraded by Soleil to sell from hold and by UBS to reduce from neutral. VeraSun's stock dropped 3.7% to $20.57.
was cut by AG Edwards to hold from buy, and its stock lost 1.3% at $44.39. AG Edwards also reduced the ratings of
to hold from buy.