The move for Nymex prices late in the session “suggests the market remains oversold by weak-handed shorts, adding volatility to the market as those shorts get squeezed out,” said Tyler Richey, an analyst for the 7:00s Report. “But the technical damage has been done and a near-term trend lower is emerging on the charts,” he said. The U.S. Energy Information Administration on Wednesday reported that crude inventories climbed by 4.5 million barrels for the week ended March 6. EIA datahave shown that supplies climbed each week since the week ended Jan. 9.
Analysts polled by Platts had forecast a crude-stock climb of 4.2 million barrels for last week, while the American Petroleum Institute late Tuesday reported a fall of 404,000 barrels. Crude stocks at the storage hub of Cushing, Okla., climbed by 2.3 million barrels. “We are almost still at the same point as last week’s EIA report as Cushing continues to see build after build increasing its record highs from last week,” said John Macaluso, research analyst at Tyche Capital Advisors. “Headlines out of Cushing will still be about when operational capacity could possibly be reached at this rate of builds in crude storage.” Gasoline supplies were down 200,000 barrels, while distillate stockpiles rose 2.5 million barrels, according to the EIA. Analysts surveyed by Platts were looking for a decline of 1.7 million barrels in gasoline stockpiles and a fall of 2.3 million barrels for distillates, which include heating oil.
On Nymex, April gasoline tracked on nearly a penny to $1.826 a gallon and April heating oil settled at $1.814 a gallon, up just over half a cent. April natural gas climbed 9.2 cents, or 3.4%, to end at $2.824 per million British thermal units ahead of the EIA’s update Thursday on natural-gas supplies. On Tuesday, the U.S. EIA cut its forecast for Nymex crude prices and said the Brent-WTI spread for 2015 is expected to widen further due to large builds in U.S. crude inventories.