LONDON, Aug 24: Oil prices jumped on Wednesday as traders digested rising crude and distillates reserves in the United States over the past week, while gasoline stocks fell sharply, dealers said.
Energy traders were also keeping an eye on Tropical Storm Katrina, currently above the Bahamas, as it tracked towards Florida.
New York’s main contract, light sweet crude for delivery in October, gained 59 cents to $66.30 per barrel in early trade.
In London, the price of Brent North Sea crude oil for delivery in October increased 50 cents to $65.15 per barrel.
The US Department of Energy (DoE) said crude oil supplies increased 1.8 million barrels in the week to August 19 — well above market predictions of a 200,000-barrel rise.
But gasoline reserves dropped sharply by 3.2 million barrels, after a fall of five million barrels the previous week. The figure beat analysts’ forecasts of a 900,000-barrel decrease.
Societe Generale analyst Deborah White said: “The market initially said gasoline stocks drew more than three million barrels but so what? That is because we are so close to the specification change.”
Gasoline demand is expected to level out as the high-demand US summer driving season draws to a close, traditionally ending on the Labour Day holiday on September 5.
Refiners will then focus on stockpiling distillates, particularly heating fuel, before the cold sets in during the northern hemisphere winter in the fourth quarter.
Stockpiles of distillates were higher as refiners shifted capacity. DoE figures showed a 1.4-million-barrel increase, in line with analysts’ forecasts.
“What is bullish is the fact that the refining problems have worsened on the east coast and they persisted in the midwest.
“And rather than seeing the recovery that most of us expected, overall crude runs only rose 35,000 barrels a day, which is practically nothing.”—AFP
