|
NEW YORK (CNN/Money) -
Oil prices fell from trading highs struck Wednesday after a government report showed that crude oil inventories for last week came in more than 3 million barrels below analysts' forecasts.
Light sweet crude for July delivery was down 26 cents to $53.50 a barrel on the New York Mercantile Exchange.
Just before the Energy Information Administration released its weekly inventories report, the contract was down 32 cents, and it jumped more than $1 immediately following the release.
U.S. crude supplies fell by 3 million barrels to 330.8 million barrels in the week ended June 3, the EIA said. Analysts surveyed by Reuters had forecast a 200,000 barrel rise.
Even with the dramatic drop, crude oil supplies remain well above the upper end of the average range for this time of year, according to the report.
The shock of the crude inventories sparked a rally and prices jumped more than $1. But as the morning wore on, crude prices eased from their highs, a move several analysts attributed to small amounts of profit taking.
"People were taking profits after the market failed to stay above $55," said Phil Flynn, an oil analyst with Alaron Trading.
Moreover, oil analyst Jan Stuart with Fimat USA said OPEC may have contributed to the drop in prices, with the group's Secretary-General Adnan Shihab-Eldin saying it will consider raising its production ceiling by 500,000 barrels a day when it meets next week in Vienna.
"(The group) is trying to calm the market," said Stuart.
Current oil output is around 30.1 million barrels a day.
Meanwhile, gasoline supplies fell by 100,000 barrels, the EIA said, coming in well below forecasts for a 900,000 barrel rise. The number for the week puts gasoline stocks below the upper end of the average range for this time of year, the EIA said.
July gasoline edged 0.07 cent lower to $1.5150 a gallon on the NYMEX.
Over the last four weeks, motor gasoline demand has averaged 9.4 million barrels per day, or 2.4 percent above the same period last year, according to the report.
In distillates, the EIA said supplies rose by 1.3 million barrels, beating forecasts for a 1.1 million barrel rise. All of the increase was in diesel fuel, with heating oil inventories flat on the week.
The administration added that distillate inventories remain in the lower half of the average range for this time of year, while demand over the last four weeks has averaged 4.1 million barrels per day, or 6.6 percent above the same period last year.
Unseasonable demand for heating oil has boosted the July contract for several sessions, but following Wednesday's EIA release the contract sank 2.18 cent to $1.5790 in New York.
"We're seeing the unwinding of the heating oil, gasoline spread," said Flynn. "Traders were buying heating oil and selling gasoline, and producers saw this and kicked up distillate production."
Click here for CNN/Money's special report -- "Oil Crunch 2005."
Where are those oil profits going? Click here.
|
