Crude futures jumped above $80 Wednesday, as a large drop in gasoline inventories sparked a rally that was then fueled by a weakening dollar.
Light, sweet crude for December delivery recently traded $1.21 higher at $80.33 a barrel on the New York Mercantile Exchange. November futures expired Tuesday at $79.09 a barrel. Brent crude on the ICE futures exchange traded 57 cents higher at $77.81 a barrel.
Government oil and fuel inventory data came in close to analyst expectations, a relief to traders after the American Petroleum Institute had reported a big increase in crude stockpiles on Tuesday. Oil inventories rose 1.3 million barrels, matching analyst expectations. Distillate stocks, including heating oil and diesel, also matched the forecast with an 800,000-barrel drop. Gasoline inventories fell 2.2 million barrels, more than the expected 800,000-barrel decline.
The data confirmed that refiners have reduced operations to a point where fuel inventories are beginning to come off, though extra oil is again building up in storage. Refiners bumped rates up to 81.1% of capacity last week, 0.2 percentage point higher than the previous week.
Refiners are avoiding a bigger increase in oil inventories by reducing imports, rather than feeding rising fuel demand. Oil imports are at 8.7 million barrels a day, the second-lowest level seen since hurricanes shut down ports along the Gulf of Mexico in September 2008. Demand, meanwhile, was down 1.4% from a week earlier, and is at its lowest since the week ended Sept. 18.
Front-month November reformulated gasoline blendstock, or RBOB, recently traded 2.97 cents, or 1.5%, higher at $2.0174 a gallon. November heating oil traded 2.88 cents, or 1.4%, higher at $2.0761 a gallon.
Related Stories
