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Oil Futures Stay Near $47 a Barrel Mark
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Thu May 19 05:51:18 2005 EST
VIENNA, Austria, May 19, 2005 (AP Online via COMTEX) -- Oil futures stayed close
to the US$47 mark Thursday, with prices held down by U.S. petroleum inventory
data showing more strong growth in crude stocks.
The market was sobered by the U.S. Department of Energy figures that revealed a
build of 334 million barrels in the week ending May 13 from the previous week -
the 13th increase in the past 14 weeks - up 34 million barrels from a year ago.
The total crude inventory figure was the highest since May 1999, Dow Jones
Newswires said.
After dipping briefly below US$47 overnight, light, sweet crude for June was up
5 cents in Europe by late morning at US$47.30 a barrel on the New York
Mercantile Exchange. The contract had fallen US$1.72 on Wednesday following the
release of the stocks report.
The overall inventory report was mixed, however, with oil products building at a
slower clip than anticipated.
Gasoline stocks rose by 1.1 million barrels to 214.8 million barrels, heating
oil stocks rose by 200,000 barrels to 38.1 million. Meanwhile, distillates fell
200,000 barrels to 103.8 million.
Unleaded gasoline was down by less then half a cent at US$1.4115 a gallon (3.8
liters), while heating oil was up by less then a cent at US$1.3633 a gallon.
Energy Security Analysis Inc.'s Rick Mueller said gasoline supplies rose
primarily because of higher refinery output and imports, adding: "Demand will
return in strength ... as retailers ensure their tanks are full in time for the
traditional end-of-May start of the summer driving season."
The Energy Department said U.S. refiners ran at 94.0 percent capacity, up from
91.8 percent a week ago. With refiners approaching peak capacity, analysts worry
that the facilities may not be able to cope when demand - especially for
gasoline - rises in summer.
"What are we going to do when demand gets stronger?" asked Alaron Futures and
Trading analyst Phil Flynn.
There are also worries about possible refinery outages when production of
heating oil is ramped up ahead of the Northern Hemisphere's next winter.
But chief analyst Ehsan Ul-Haq of PVM Oil Associates in Vienna said that - for
now - less-than-expected appetite for gasoline would likely keep prices in
check.
"Gasoline demand in the U.S. ... is strong, but not as strong as expected
previously," he said. "People are thinking twice before buying a new SUV, and
people are driving less because of higher prices,"
Additionally, he said prices are being weighed down by Saudi determination "to
send as much oil as possible before the second half of the year," which is
traditionally a period of higher demand.
Recent data from Washington and the Paris-based International Energy Agency
appears to back comments from OPEC oil ministers who repeatedly say that markets
are well-supplied. The Organization of Petroleum Exporting Countries is already
pumping at full-tilt, at nearly 30 million barrels daily, to steady prices and
calm fears about the group's excess capacity.
"The market is well supplied, we are not in agreement with putting more barrels
on the market," Venezuelan oil minister Rafael Ramirez said Wednesday.
Venezuela, the fifth-largest oil exporter, has consistently defended high prices
within OPEC, which supplies 40 percent of world crude.
But PVM forecast higher demand in the second half of the year, in part because
of China's hunger for crude and oil products.
April data showing a 23 percent increase in crude imports by China over the year
defies "recent statements that demand growth (there) is slowing much faster than
anticipated," the report said.
Spaf
