Oil Rises as U.S. Draws Outweigh Economy Worries
Oil rose Wednesday, as draws in U.S. crude and gasoline stockpiles overcame wider concerns about the health of the world's largest economy.
U.S. light, sweet crude futures (delayed) rose 22 cents to $72.64 per barrel in midafternoon Wednesday trade.
London Brent crude lost 31 cents, to $71.49 per barrel.
Bullish draws in U.S. fuel and crude inventories added to supply concerns during the peak summer gasoline demand season.
Weekly U.S. government data from the Energy Information Administration showed a 1.7 million barrel draw in U.S. gasoline stock as refinery utilization rates fell 2.3 percentage points due to unplanned outages.
Crude stocks fell 4.1 million barrels, above analyst calls for a 2.7 million barrel draw, as imports slowed.
"We're down more than 10 million barrels in crude in the past two weeks and that's a lot of oil lost. Obviously this is a shock to the system," said Phil Flynn of Alaron Trading.
"It shows you that refineries are still having problems, and they can't seem to get to the normal seasonal run levels," Flynn said.
Worries about a possible slowing in the U.S. economy, the debt market squeeze and falling stock prices have sent U.S. oil prices tumbling from a record high of $78.77 a barrel struck last Wednesday.
"Commodity markets, for the most part, still seem to be transfixed by the growth picture in the U.S." said MF Global Energy.
U.S. Energy Secretary Sam Bodman Wednesday said he planned to speak with OPEC members ahead of the producer group's next meeting on Sept. 11, to encourage them to increase crude output.
"We're continuing to struggle with higher prices -- prices higher than either they or we would like -- so I think it's time for them to look at it," Bodman said.
Some analysts and consumer nations are concerned supplies could be stretched to keep pace with demand growth later this year unless the cartel raises supplies.
But Venezuelan Oil Minister Rafael Ramirez echoed comments from other OPEC members that markets remain well supplied.
"There is enough oil in the market," Ramirez told Reuters Wednesday while visiting Uruguay. "When we have the OPEC meeting in September, we will be able to make a more exact determination of the market situation."
U.S. stocks rose Wednesday, boosted by technology shares which sent the Nasdaq composite index up more than 2 percent.
Financial companies also shone as investors bought beaten-down shares and took comfort in the Federal Reserve's view that the economy was likely to keep growing despite turmoil in credit markets.