Crude Oil Rises a Second Day


Crude oil rose for a second day after a U.S. Energy Department report yesterday showed a bigger- than-forecast decline in inventories of gasoline as refiners shut units and imports fell.

Gasoline supplies dropped 6.39 million barrels to 202.8 million barrels last week, the biggest decline since October 2002 when tropical storms disrupted Gulf of Mexico output. Gold, silver and nickel also rebounded on speculation declines since July were exaggerated.

Crude oil for September delivery rose as much as 96 cents, or 0.8 percent, to $116.96 a barrel, and was at $116.70 at 3:14 p.m. Singapore time on the New York Mercantile Exchange.

Yesterday, futures increased $2.99, or 2.6 percent, to settle at $116 a barrel, the biggest one-day gain since July 30. Prices are up 61 percent from a year ago.

U.S. refineries operated at 85.9 percent of capacity, down 1.1 percentage points from the week before, the report showed. Analysts forecast a 0.5 percentage-point drop.

Petroleum-product imports fell 17 percent to 2.6 million barrels a day, the lowest since the week ended April 1, 2005, the report showed. Crude oil imports dropped 5.3 percent to 9.66 million barrels a day, the lowest since the week ended July 4.

Inventories of crude oil fell 316,000 barrels to 296.5 million, the department said. Supplies were forecast to rise 300,000 barrels, according to the median of responses by 13 analysts surveyed by Bloomberg News.

U.S. fuel demand averaged 20.2 million barrels a day during the past four weeks, down 2.8 percent from a year earlier, the department said. Gasoline consumption averaged 9.4 million barrels a day over the period, down 1.9 percent from a year ago.

Gasoline use declined 2.1 percent through July, the American Petroleum Institute said in a monthly report released yesterday. Auto sales fell to the lowest since 1993 in the month, causing U.S. retail sales to drop for the first time in five months. Consumer spending makes up more than two-thirds of the U.S. economy.

Prices of oil have slipped more than $30, or 21 percent, from the record $147.27 reached on July 11 amid signs that U.S. fuel demand is falling because of record pump prices and a slowing economy.

U.S. motorists drove less in June for an eighth consecutive month, the Federal Highway Administration said. Vehicle-miles traveled fell 4.7 percent from a year earlier, the Washington- based agency said in a report yesterday. The month's 12.2 billion-mile drop brought the total since November to 53.2 billion miles, the agency said.

BP Plc and Botas International Ltd., a Turkish operating company, started damage assessment at an oil pipeline in the eastern part of the country following a fire.

BP, Europe's second-biggest oil company, is now able to access the Baku-Tbilisi-Ceyhan pipeline after it cooled down, company spokesman Toby Odone said yesterday. The assessment will be conducted for ``a week or so,'' he said.

The fire on the link, which has a 1 million barrel-a-day capacity, started on Aug. 5 following an explosion in the Erzincan province. The Kurdistan Workers' Party claimed responsibility for the attack.

BP's venture declared force majeure on exports from the Baku-Supsa oil link, Odone said. The pipeline from Azerbaijan through Georgia to the Black Sea was closed for a second day as a precaution. Russian President Dmitry Medvedev Aug. 12 ordered a halt to a Russian offensive in Georgia after six days of fighting.

 

 

 

 

 


TradingEconomics.com, Bloomberg
8/14/2008 7:20:04 AM