Oil prices hardly moved in morning trading after declining on 24 June when a government report confirmed that US fuel supplies rose higher than forecast amid a plunge in demand for petroleum products, Bloomberg reported.
Crude oil for August 2009 delivery was at $68.60 a barrel, down $0.07, in electronic trading on the New York Mercantile Exchange at 11.41am Singapore time. In June 2009 the contract fell $0.57, or 0.8%, to settle at $68.67.
The US Department of Energy said that gasoline inventories added 3.87 million barrels to 208.9 million the previous week. Stockpiles were estimated to increase by one million barrels, as per the Bloomberg News survey.
Refineries operated at the highest rates in 2009 and fuel demand dropped 5.5%.
Distillate fuel supplies, a category that comprises heating oil and diesel, gained 2.08 million barrels to 152.1 million. An 850,000-barrel rise was forecast, as per the median of 15 analysts surveyed.
The stockpiles of diesel rose 2.18 million barrels to 111.6 million.
Commodity Warrants Australia managing director Peter McGuire said that there was little to support price rises in the short term.
“Rising inventories have got to be a little bit of a handbrake on the price,” said McGuire.
Brent crude for August 2009 settlement was traded at $68.25 a barrel, down $0.08, on London’s ICE Futures Europe exchange at 11.35am Singapore time. On 24 June the contract dropped 0.7% to $68.33 a barrel.
Less gasoline incentive
The refiners may have low inducement to pump gasoline as the so-called crack spread, or profit margin, between the motor fuel and crude oil has declined. The price difference has slid to $9.28 a barrel on 25 June, down 43%, compared with $16.52 a barrel on 16 June.
The consumption of fuel dropped 1.05 million barrels a day to 17.9 million last week, the report showed. The demand of gasoline dropped 225,000 barrels a day, or 2.4%, to 9.13 million barrels.
The oil inventories of crude fell 3.87 million barrels to 353.9 million, the lowest since March 2009, the report showed. Stockpiles, which have fallen in six of the past seven weeks, are up 17% from a year earlier.
Gasoline for July 2009 delivery was at $1.8445 a gallon, up 0.20 cents at 11.05am Singapore time. The contract yesterday fell 5.07 cents, or 2.7%, to end the session at $1.8425 a gallon in New York. It was the lowest settlement since 22 May 2009.