Reformulated-gasoline contract tallies biggest gain
NEW YORK (MarketWatch) -- Crude-oil futures erased their earlier losses Wednesday, gaining as government data showed U.S. gasoline demand jumped last week to the highest level in three months.
Rising demand lowered U.S. gasoline inventories. Crude stockpiles also declined, but the drop was less than analysts had expected as crude imports jumped 3.8% last week, partly offsetting higher consumption.
On the New York Mercantile Exchange, crude for October delivery was last up 56 cents, or 0.8%, at $68.61 a barrel. It fell as low as $67.05 earlier in the session. Crude had slumped 6.4% in the previous two sessions to reach the lowest level seen in two weeks.
In its update for the week ended Aug. 28, the Energy Information Administration reported crude inventories fell by 400,000 barrels. Analysts surveyed by Platts had expected a decline of 1.9 million barrels.
At 343.4 million barrels, crude inventories stand at a level above the upper boundary of the average range for this time of year.
Petroleum products supplied, an implied gauge of demand, rose 1.2% to 19.7 million barrels a day, the EIA's data showed, with gasoline demand up 4.1% to 9.48 million barrels a day, the highest level since the week ended May 22.
Refineries put nearly 15 million barrels a day of crude into production of petroleum products, the highest level in six weeks. Utilization rate rose to 87.2% of capacity.
Rising crude input was partly offset by another jump in crude imports. The U.S. imported 9.58 million barrels a day of crude last week, up 3.8% from a week ago.
The EIA also reported that gasoline inventories fell by 3 million barrels last week and that distillates rose by 1.2 million barrels. Inventories of distillate fuels, which include heating oil and diesel, are now the most plentiful seen in more than two decades.
Both gasoline and distillate inventories were in the upper half of the average range for this time of year.
"While gasoline is seeing a little more demand we feel the equity markets and price of gasoline are the main drivers of the energy markets today," said Tariq Zahir, managing member of Tyche Capital Advisors.
"We could see lower prices if the equity markets see another leg downward questioning the economic recovery."
Also in energy trading, October reformulated gasoline rose 3.08 cents, or 1.7%, to $1.813 a gallon and October heating oil gained slightly to $1.7632 a gallon.
