Market Close: Jan 31 Mixed
Jan 31st, 2018 by loren
Oil prices ended higher Wednesday, buoyed by data from the Energy Information Administration showing strong U.S. demand for gasoline and distillates and declines in domestic supplies of the petroleum products, even as U.S. crude supplies climbed for the first time in 11 weeks.
March West Texas Intermediate crude rose 23 cents, or 0.4%, to settle at $64.73 a barrel on the New York Mercantile Exchange after spending time below $64 following the release of data on U.S. supplies. For the month and year to date, the March contract climbed 7.1%. On Tuesday, the U.S. crude benchmark tumbled 1.5% to $64.50 a barrel, registering only the second back-to-back decline in January, amid fresh worries about mounting U.S. crude production. March Brent crude the global benchmark, rose 3 cents to $69.05 a barrel on ICE Futures Europe. The March contract, which expired at the session’s settlement, was up about 3.3% for the month of January. April Brent the new front month, settled at $68.89, up 37 cents, or 0.5%.
The U.S. Energy Information Administration reported Wednesday that domestic crude supplies rose 6.8 million barrels for the week ended Jan. 26. That was the first weekly rise reported by the government agency in 11 weeks. The market may be attributing some for the crude-supply increase to “winter weather in the south that caused refiners to slow down,” said Phil Flynn, senior market analyst at Price Futures Group.
Analysts surveyed by S&P Global Platts had forecast a climb of 325,000 barrels, while Price Futures Group expected a rise of 2 million barrels. The American Pertroleum Institute on Tuesday reported an increase of 3.2 million barrels.“As seasonal maintenance kicks in, U.S. crude inventories have built for the first week in 11,” said Matt Smith, director of commodity research at ClipperData. However, “lower refinery runs and an uptick in implied demand has translated into a draw for both gasoline and middle distillates, helping to blunt some of the bearish impact of the solid crude build.” Gasoline stockpiles fell by 2 million barrels for the week, while distillate stockpiles declined by 1.9 million barrels, according to the EIA. The S&P Global Platts survey forecast a supply rise of 1.1 million barrels for gasoline and a fall of 1.5 million barrels for distillates. Flynn pointed out that over the last four weeks, implied gasoline demand was up 7.1% compared with the same time last year, while distillate demand surged 13.3%. “Super strong demand” offered support, he said.
On Nymex, February gasoline added 0.6% to $1.908 a gallon, while February heating oil slipped 0.1% to $2.069 a gallon. The February contracts expired at the day’s settlement. Meanwhile, total U.S. crude output edged up by 41,000 barrels a day to 9.919 million barrels a day, EIA data showed.