Market Close: April 22 Mixed
Apr 22nd, 2015 by loren
Oil futures settled lower on Wednesday after a U.S. government report showed crude supplies rose for a 15th week in a row, but domestic output slipped and gasoline inventories fell more than expected.
On the New York Mercantile Exchange, June crude fell 45 cents, or 0.8%, to settle at $56.16 a barrel. It was trading at around $56.10 shortly before the supply data and topped $57 immediately after them. June Brent crude on London’s ICE Futures exchange tacked on 65 cents, or 1.1%, to $62.73 a barrel.
Early Wednesday, the U.S. Energy Information Administration reported another increase in crude supplies, but data also showed that gasoline inventories fell more than expected. Nymex prices had reversed losses immediately after the inventory report as production ticked lower for a second consecutive week, but crude inventories still saw a “solid build” as refinery utilization fell and imports increased, said Matt Smith, commodity analyst at Schneider Electric. Crude inventories rose 5.3 million barrels for the week ended April 17. That is about double the 2.6 million-barrel increase analysts polled by Platts forecast, but less than the 5.5 million barrel rise reported late Tuesday by the American Petroleum Institute. Domestic crude-oil production fell by around 18,000 barrels, with output still up roughly 13.5% year on year, according to Tim Evans at Citi Futures. The decline in output, however, encouraged market expectations that recent declines in the number of U.S. rigs actively drilling for oil are finally impacting production levels. “The relationship between falling rig counts and U.S. production remains something to watch going forward as rig counts continue to fall, but most major production forecasts remain positive for 2015 and 2016,” said Tyler Richey, an analyst for the 7:00’s Report.
Meanwhile, implied demand for petroleum products over the last four weeks were up 5.2% from the same time last year. Gasoline supplies were down 2.1 million barrels, while distillate stockpiles rose 400,000 barrels last week, according to the EIA. Analysts surveyed by Platts were looking for a decrease of 1.4 million barrels for gasoline and an increase of 500,000 barrels for distillates, which include heating oil.