Oil
Prices Rise As Gas Supply Declines
Crude
futures rose slightly Wednesday after U.S. government
data showed declining domestic inventories of oil and
gasoline.
Light, sweet crude for May delivery climbed 11 cents
to $52.40 per barrel in early trade on the New York
Mercantile Exchange.
On London's International Petroleum Exchange, Brent
crude June contracts were up 67 cents to $53.61 per
barrel.
The Department of Energy said in its weekly petroleum
supply report that the U.S. supply of crude oil fell
last week by 1.8 million barrels to 318.9 million barrels,
or 8 percent above year ago levels. Gasoline inventories
declined by 1.5 million barrels to 211.6 million barrels,
or 5 percent above year ago levels.
The supply of distillate fuel, which includes diesel,
was flat at 104 million barrels, or roughly 1 percent
above year ago levels, the agency said.
Gasoline demand has averaged more than 9 million barrels
a day over the past four weeks, roughly 1.2 percent
above year ago levels.
Qatar's oil minister, Abdullah bin Hamad Al Attiyah,
said Wednesday that global oil inventories were strong,
with more in the market than the Organization of Petroleum
Exporting Countries had expected. Although he said it
was too early to predict what OPEC will do at its June
meeting, Al Attiyah said the group will consider factors
"including the inventories."
At a March meeting in Iran, OPEC increased its production
ceiling by 500,000 to 27.5 million barrels a day, and
provided for an identical increase if crude prices did
not stabilize.
Al Attiyah, speaking in Paris on Wednesday, said OPEC
was not likely to implement the optional increase before
its next meeting, and hinted that the organization also
was unlikely to increase production at its June meeting
in Vienna.
"I believe today the market's very, very balanced,"
he said. "The inventory today is the highest since
2002. So it means there's more oil in the market than
we expected."
Al Attiyah also stressed that OPEC members have little
room to increase production. "OPEC is almost producing
to the maximum," he said. "In a few countries
they have spare capacity, but in most member countries
they have no spare capacity."
He also indicated that oil prices should ideally be
between $40 and $50 a barrel.
Crude futures are down more than $5 from the intraday
peak of $58.28 on April 4.
By
BRAD FOSS
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