10:03 PMCrude Ticks Higher As Gasoline Inventories Fall
NEW YORK -- Oil futures rose Wednesday as fighting continued in Libya and the U.S. government said U.S. gasoline supplies fell sharply last week.
Light, sweet crude for May delivery rose 77 cents, or 0.7%, to $105.74 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange was down 9 cents at $115.61 a barrel. The front-month Nymex contract got a roughly $1 boost with the expiration of the April contract on Tuesday, which settled at $104 a barrel.
The U.S. and its allies continued to pound forces loyal to Col. Moammar Gadhafi in Libya, where 1.3 million barrels a day of oil exports have been sealed off by the fighting and Western sanctions. The U.S. said Tuesday the pace of attacks should slow in the coming days, though market participants have been gripped by uncertainty over how long the fighting will last.
"Continued insufficient coordination and a vague definition of the coalition's objectives...do not help to ease concerns about oil supply security," analysts from Vienna-based JBC Energy said in a report.
Crude prices have risen sharply in recent sessions as the Western intervention in Libya and fears of broader supply disruptions overshadow the disaster in Japan. Crude prices have returned to highs reached before the March 11 earthquake devastated northeastern Japan, sparked a nuclear crisis and sent investors fleeing risky assets like commodities. Nymex crude is up more than 8% over the last week.
Crude prices extended their gains after the Department of Energy reported a larger-than-expected decline in U.S. gasoline inventories last week. The DOE's Energy Information Administration said gasoline stocks fell 5.3 million barrels during the week ended Friday. Analysts surveyed by Dow Jones Newswires expected a 2-million-barrel decline.
Crude inventories rose 2.1 million barrels, stocks of distillates, including heating oil and diesel, stocks were flat, the EIA said. Refinery runs rose 0.7 percentage point to 84.1% of capacity. Analysts expected crude stocks to rise 1.7 million barrels, while distillate stocks were seen falling 1.4 million barrels and refinery runs were seen as flat at 83.4%.
Despite the draw in gasoline, the rise in crude stocks illustrates that the U.S. remains well supplied with oil in spite of the recent turmoil in the Middle East, said Carl Larry, head of Oil Outlooks and Opinions LLC in Houston.
"There's nothing here in these stats to say we're undersupplied," he said.
Front-month April reformulated gasoline blendstock, or RBOB, recently rose 1.3 cents, or 0.4%, to $3.0168. April heating oil fell 0.75 cent, or 0.2%, to $3.0687 a gallon.
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