oil ends sharply lower on large supply rise

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    NYMEX oil ends sharply lower on large supply rise
    AAP News
    8:46:020 27/01/2005
    (Updates with settlement prices)
    NEW YORK, Jan 26 (Reuters) - U.S. crude oil futures ended
    sharply lower Wednesday in a fund-led sell-off triggered by a
    large rise in crude inventories last week.
    NYMEX March crude last traded down 86 cents, or 1.7
    percent, at $48.78 a barrel after sinking to a session low of
    $47.90. This morning it had risen as high as $49.70, just below
    the overnight high of $49.74 which marked a fresh eight-week
    peak.
    "We failed to retest Tuesday's high of $49.75; then we had
    a hard time making any headway once we got below $49. We hit
    some stops and saw more aggressive fund selling," said Marshall
    Steeves, an analyst at Refco.
    The U.S. Energy Information Administration said domestic
    crude stocks rose 3.4 million barrels to 295.6 million barrels
    in the week to Jan. 21, increasing for the second consecutive
    week.
    That was larger than the average expectation in a Reuters
    survey of analysts of a 1.4 million barrel build.
    "We had a very high level of crude oil imports at 10.5
    million bpd and refinery runs were lower, so a build makes
    sense and that was certainly bearish for the crude," Steeves
    said.
    In London, Brent crude settled 45 cents lower, or
    nearly 1 percent, at $46.51 a barrel, after dropping to a
    session low of $45.60. Earlier, it hit $47, which was its
    loftiest level in 12 weeks.
    NYMEX February heating oil took heavy losses as well
    and settled at $1.4033 a gallon, down 2.15 cents, or 1.5
    percent, after dropping as low as $1.3850. It posted a session
    peak of $1.44, the highest since Dec. 20.
    February gasoline bucked the trend, settling 1.48
    cents up, or 1.1 percent, at $1.3593 a gallon, buoyed by an
    unexpected stock drop and news of a fire at Sunoco Inc.'s
    355,000 barrel per day refinery in Philadelphia Tuesday
    night.
    A spokesman said that a 60,000 bpd gasoline-making unit had
    been shut because of the fire, but he could not say when the
    unit would restart.
    February gasoline hit a session high of $1.3650, a fresh
    13-week high, and posted the day's low at $1.33.
    Gasoline gained for the second straight session. On Tuesday
    it led a market rally following a fire at a ConocoPhillips
    refinery in Belle Chasse, Louisiana.
    In the weekly EIA data, distillate stocks were down 2.3
    million barrels at 121.5 million barrels, within expectations.
    Heating oil stocks fell 2.1 million barrels to 47 million
    barrels.
    Gasoline supplies fell 2.3 million barrels to 214.7 million
    barrels, the first drop in 10 weeks, against expectations for a
    500,000 barrel increase.
    Refinery runs were down 0.5 percentage point at 91 percent
    of capacity, in line with expectations.
    Several OPEC ministers said this week that oil prices were
    too high to justify cutting production, despite some fear of a
    build in supplies during the seasonally weak second quarter.
    The group's president said on Wednesday that OPEC is
    worried about oversupply during the second quarter but can
    afford to wait until a March meeting before cutting production.
    "Given the tremendous rise in this rally, you've got to
    think there is some profit-taking going on ahead of the Jan. 30
    OPEC meeting," said Walter Zimmerman, an analyst at United
    Energy Inc.
 
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