Crude Holds to Losses as U.S. Oil Stockpiles Rise
02/21/2013| 12:02pm US/Eastern
--Increase in U.S. crude stockpiles keeps weight on oil futures
--Nymex crude recently 2.1% lower at $93.18/bbl
--Domestic oil stockpiles rise to highest level since July, EIA data show
By Jerry A. DiColo
NEW YORK--U.S. crude futures held to early losses Thursday after weekly government data showed an increase in domestic oil stockpiles, while gasoline futures pared losses as fuel supplies fell.
The Energy Information Administration said oil stockpiles increased by 4.1 million barrels last week, above analysts' average forecast of a 1.7-million-barrel increase. The rise sent total stockpiles to 376.4 million barrels, the highest level since July, as an increase in both imports and domestic output coincided with a fall in refinery operations.
Crude stockpiles are at the highest level for this week since the EIA began keeping data in 1982.
Light, sweet crude for April delivery recently traded lower by $2.04, or 2.1%, at $93.18 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange for April delivery traded $1.53 lower at $114.07 a barrel.
Gasoline futures also remained in negative territory, though the drop in stocks of the fuel pulled futures off earlier lows. Stockpiles fell by 2.9 million barrels, the EIA said, a larger drop than the 700,000-barrel decline analysts expected. Stocks of distillate, which include heating oil and diesel, fell by 2.3 million barrels.
Front-month March reformulated gasoline blendstock, or RBOB, recently traded lower by 0.95 cent, or 0.3%, at $3.0500 a gallon. It fell as low as $2.9782 a gallon earlier in the session.
"It's bearish for crude and bullish for refined products," said Dominick Chirichella, an analyst at the Energy Management Institute, noting that the stockpile decline in gasoline is "adding fuel to the fire" that lower supplies in the Northeast could keep prices elevated.
The data followed weak economic data earlier Thursday that raised concerns about future oil demand. The Labor Department said U.S. jobless claims rose last week, highlighting the slow recovery in the labor market. Additionally, the decline in euro-zone business activity accelerated in February, according to data compiler Markit, which economists say likely means the bloc's economic contraction will continue through the first quarter.
Oil markets are tied to the global economic outlook, as weak growth typically results in sagging demand for gasoline, diesel and other fuels.
March heating oil recently traded 4.18 cents lower at $3.1145 a gallon.
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