Oil prices rebounded later in the day after falling early as US dollar strengthened following an announcement from the Federal Reserve, which decided to raise the discount rate by 0.25% to 7.25%. Yesterday, Energy Information Administration (EIA) reported an increase of over 3 million barrels in oil stockpiles, while gasoline and distillate inventories increase by 1.62 million barrels and nearly 3 million barrels respectively, though the data, which signalled a decreased demand, had little impact on the oil prices as US benchmark crude closed above $79 yesterday. Earlier this week, data from the American Petroleum Institute (API) showed a fall in US crude imports, while gasoline and distillate stockpiles, which includes heating oil, increased by 1.4 million barrels and 1.5 million barrels respectively. The API update said that crude oil inventories fell, but the decline was marginal at just 63,000 barrels. Later in the day the American currency retreated after making strong gains on the Fed announcement to help crude to a recovery. April Brent Crude improved to US$77.65/barrel, while US light, sweet crude returned to US$79/barrel. Oil and gas stocks were mixed today. Tullow Oil (LSE: TLW) was in the lead with a 3% advance. Shell (LSE: RDSB) also was in the black, gaining 1%, while fellow supermajor BP (LSE: BP) was flat, as was BG Group (LSE: BG). Another FTSE 100 constituent Cairn Energy (LSE: CNE) declined marginally. Amec (LSE: AMEC) posted an insignificant gain, while fellow oil and gas engineering firm Petrofac (LSE: PFC) was flat. Midcaps fell into the same pattern. Dragon Oil (LSE: DGO) was the top performer with a 4% advance. Premier Oil (LSE: PMO) added 1.2%, while Dana Petroleum (LSE: DNX) and Melrose Resources (LSE: MRS) were flat. JKX Oil & Gas (LSE: JKX) and Soco International (LSE: SIA) slipped 1.5%, while Heritage Oil (LSE: HOIL) and Salamander Energy (LSE: SMDR) added 1.3%. Wood Group (LSE: WG) added nearly 1%, while another services company Wellstream Holdings (LSE: WSM) remained flat. North America focused oil & gas junior Pantheon Resources (AIM: PANR) led the small caps with a 13% rally. Iraq operating Irish oil company Petrel Resources (AIM: PET) and Mongolia-focused Petro Matad Ltd (AIM: MATD) followed, climbing 6%. Oil and gas company with assets in Iraq, Syria and Gulf of Mexico Gulfsands Petroleum (AIM: GPX) slipped 4%.

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