09/17/2008 - Updated 4:05 PM ET
Oil futures rebound after two-session lossTraders keep wary eye on financial markets; weak demand concerns remain
By Myra P. Saefong, MarketWatch & Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) -- Oil futures closed with a gain of nearly 7% Wednesday, as several weekly declines in U.S. supplies of crude and gasoline combined with weakness in the U.S. dollar to help oil recover much of its two-session loss of $10 a barrel.
The U.S. government bailout of American International Group Inc. [
AIG] also provided a boost for oil prices, but weakness in petroleum demand kept prices well below $100.
Crude oil for October delivery rose $6.01, or 6.6%, to close at $97.16 a barrel on the New York Mercantile Exchange.
The contract was at $96.70 in electronic trading on Globex as of 3:30 p.m. EDT.
U.S. crude supplies fell by 6.3 million barrels for the week ended Sept. 12, the U.S. Energy Department's Energy Information Administration reported Wednesday.
Total supplies stand at 291.7 million barrels, down 8% from a year ago. Supplies have fallen 14.2 million barrels in four weeks, according to the EIA data.
Separately, the American Petroleum Institute posted a 4.4 million-barrel decline to 286.3 million.
"Hurricane Ike weighed on imports, and the pace of imports is below the level needed to sustain crude-oil inventories," said Chris Lafakis, an associate economist at Moody's Economy.com. Crude-oil imports were down 71,000 barrels last week from the previous week, the EIA said.
The release of oil from the Strategic Petroleum Reserve has dampened the impact of lower imports, as they usually do, said James Williams, an economist at WTRG Economics. "Next week's imports will be far lower as they will reflect the full impact of a post-hurricane week."
"Offshore production remains depressed; Gulf Coast production, which accounts for 25% of the nation's oil production, is completely shut down," Lafakis said in a report issued after the supply data.
Motor gasoline supplies fell 3.3 million to 184.6 million in the latest week, the EIA said. They're down a total of 32.5 million in eight weeks.
Inventories of the fuel fell by 4.3 million to 191.8 million, according to the API.
And distillate supplies lost 900,000 barrels to stand at 129.6 million, the EIA said. They were down 1.7 million at 131.15 million, the API reported.
On Nymex, October reformulated gasoline climbed 6.2 cents to close at $2.463 a gallon, and October heating oil finished at $2.8247 a gallon, up 10.5 cents.
The Gulf takes a hit
Refinery utilization suffered a steep drop, falling to 77.4% of capacity last week from 78.3% a week earlier, according to the EIA.[more]
http://markets.usatoday.com/custom/...S&guid={1E69D276-42B2-4AF6-A858-30FE5A2E53CD}
Inventories are due in 8 minutes, we will see!
Yeah right!:notrust:
