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Oil prices rise on expectations for decline in U.S. gasoline stocks

Oil prices rise on expectations for decline in U.S. gasoline stocks

Oil prices fell Wednesday despite expectations that U.S. fuel inventory data would again show a drop in domestic gasoline stocks.
Light, sweet crude for June delivery fell 23 cents to US$64.66 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract fell US$1.31 to US$64.40 a barrel Tuesday.
Brent crude for June was down 17 cents at US$66.83 a barrel on the ICE Futures exchange in London.
Heating oil futures dropped a cent to US$1.8725 a gallon, while natural gas prices added 0.2 cent to US$7.720 per 1,000 cubic feet.
Stockpiles of gasoline for the week ended April 27 were estimated to have declined by 1.2 million barrels in the U.S. Department of Energy petroleum supply snapshot to be released later Wednesday, according to a Dow Jones Newswires survey of 10 energy analysts.
Traders said the resumption of production at a number of refineries had dampened the market's recent bullish mood.
"As soon as units are ready they are being returned, and will be returned, to service," said Peter Beutel, an analyst at Cameron Hanover. "With margins as high as they are, it makes good business sense to refine as much oil as possible."
U.S. gasoline stocks typically grow in the months of April and May but have been depressed this year by strong demand, low imports and refinery outages.
But analysts also predicted the U.S. Energy Information Administration report to show refinery utilization increased by 0.8 of a percentage point. After a string of recent refinery outages, several refineries were restarting shuttered units, including Gary-Williams Energy Corp.'s 55,000 barrel-a-day Wynnewood, Oklahoma, refinery and Valero Energy Corp.'s Texas City, Texas, plant.
Olivier Jakob, an analyst at Petromatrix in Switzerland, warned of sellers lurking at resistance levels.
"The weekly DoE statistics will provide their usual volatility and we will remain cautious on any immediate upturn following their release," he said.
"The recent patterns are showing strong selling at the resistance levels and we would not exclude further offloading of positions in the last day before the start of the Iraq conference and the expectations of historic 'polite' talks between Iran and the U.S."
The report is also expected to show crude stocks were forecast to rise by 1.15 million barrels, while distillate stocks, which include heating oil and diesel fuel, were likely to grow by 210,000 barrels on average.
Crude futures were also supported by news Tuesday that six foreign oil workers were kidnapped and a Nigerian sailor was killed when dynamite-wielding militants attacked an oil vessel in Nigeria's oil-rich south.
A Nigerian spokesman for San Francisco-based Chevron said the company had shut down an oil station that supplies the ship because of the attack, decreasing production by 15,000 barrels a day.
Stepped-up violence since early 2006 in the unruly southern region where crude is pumped has cut Nigeria's daily production by about one quarter, helping send global crude prices higher. Nigeria, Africa's largest oil producer and a main crude supplier to the United States, is both one of Africa's richest countries and one of its most problem-laden, with vast oil reserves but also rampant corruption and violent crime.


Updated : 2021-04-12 02:35 GMT+08:00