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NEW YORK (CNN/Money.com) -
Oil prices closed low Wednesday after a government report showed that crude supplies had jumped more than expected last week, despite seesawing midsession on terror worries.
U.S. crude for January delivery ended the day down 73 cents at $59.21 a barrel on the New York Mercantile Exchange. Crude was up 53 cents at $58.14 just before the Energy Information Administration report and has hovered around $60 a barrel all week on fears that a cold snap in the Northeast could strain heating-fuel supplies.
But the EIA's weekly inventory data snapped five-straight sessions of gains, reporting that crude oil inventories rose 2.7 million barrels in the week ended Dec. 2, versus consensus estimates from Briefing.com for a fall of 1.9 million barrels.
Gasoline inventories rose by 2.7 million barrels, more than the forecasted 1.1 million barrel rise; and distillate supplies also rose by 2.7 million barrels. Briefing.com had estimated that distillates would rise by only 1.8 million barrels.
"Cold notwithstanding, we had adequate supply and no real global supply threats," said Mike Fitzpatrick, vice president of Energy Risk Management at Fimat USA.
The weekly report showed that refineries operated at 90.6 percent of their operable capacity last week, the first week they have averaged above 90 percent of potential since Hurricanes Katrina and Rita hit.
Moreover, the EIA said that distillate fuel supply, which includes heating oil, is in the midaverage range for this time of year. Crude inventories are well above the upper end of the average range for the season, and total commercial petroleum inventories are just above the average range for this time of year.
Though this week's EIA report came in far better than expected, analysts say that the full effect of this week's cold snap won't show up until next week's inventory release.
International rumblings
Traders were also keeping an eye on news from overseas, unnerved by al-Qaeda's new call for militants to strike oil sites in Muslim states that pump nearly 20 percent of world supply.
"I call on mujahideen to concentrate their attacks on Muslims' stolen oil, from which most of the revenues go to the enemies of Islam while most of what they leave is seized by the thieves who rule our countries," al-Qaeda's deputy leader Ayman al-Zawahri said in a video interview on an Islamist Web site.
The threat briefly pushed crude above $60 in the afternoon.
But Fitzpatrick said this threat wouldn't leave a lasting impression on markets because "al-Qaeda hasn't really been able to hit oil infrastructures outside of Iraq."
The al-Qaeda video comes ahead of next Monday's Organization of the Petroleum Exporting Countries meeting in Kuwait, where cartel members will map out a strategy for early next year, which will likely guide crude prices.
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