Prices rise by more than a dollar as crude inventories are reported at three year low levels
After dropping for four consecutive sessions, crude oil prices rose today. Prices increased after Energy Department reported more than expected slump in crude inventories for the week ended 14 December. The drop took the inventory level to lowest level in almost three years.
For the day ending Wednesday, 19 December, 2007, crude-oil futures for light sweet crude for February delivery closed at $91.24/barrel (higher by $1.16/barrel or 1.3%) on the New York Mercantile Exchange. Futures rose as high as $92.6 earlier in the day after the Energy Department was out with the weekly inventory report. Prices are 46% higher than the year before.
As per the weekly inventory report by the Energy Department, U.S. crude inventories fell by 7.6 million barrels to 296.9 million barrels in the week ending 14 December, the lowest since February 2005. This was the fifth straight week of drop. U.S. refineries operated at 87.8% of their operable capacity last week, down 1% from the previous week's 88.8%.
As per EIA, at 296.9 million barrels, U.S. crude inventories are in the lower half of the average range for this time of year and at lowest level since February, 2005. U.S. crude-oil imports averaged 9.1 million barrels per day last week, down 952,000 barrels per day from the previous week.
The EIA also reported that U.S. motor gasoline inventories increased by 3 million barrels to 205.2 million barrels last week and distillate supplies, which include heating oil and diesel, decreased by 2.1 million barrels to 129.4 million barrels.
Brent crude oil for February settlement rose $2.09 (2.3%) to $92.21 on the London-based ICE Futures Europe exchange.
Natural gas, gasoline and heating oil – all rise
January natural gas today rose 3.8 cents at $7.179 per million British thermal units.
Against this backdrop, January reformulated gasoline gained 2.76 cents at $2.3319 a gallon and January heating oil edged up 4.25 cent at $2.5979 a gallon.
As per EIA, global oil markets will likely remain tight through 2008 and monthly average oil prices are expected to near $85 per barrel over the next year. The IEA, an adviser to 27 nations, said global demand in 2008 will rise 2.5% to 87.8 million barrels a day.
At the MCX, crude oil for January delivery closed at Rs 3597/barrel, higher by Rs 67 (1.9%) against previous day’s close. Natural gas for December delivery closed at Rs 279.5/mmtbu, lower by 2.1/mmtbu (0.7%).
Members of the OPEC left production targets unchanged at the 5 December meeting in Abu Dhabi. The group, which produces 40% of the world's oil, will review output at a 1 February, 2008 meeting in Vienna.