Oil Above $92 After Mixed Inventory Report
Oil futures fluctuated Wednesday after a mixed government report _ that heating oil stocks were higher than expected last week but crude oil and gasoline stockpiles grew less than expected.
The Energy Department's Energy Information Administration said inventories of distillates, which include heating oil, dropped by 100,000 barrels last week, much less than the 1.2 million barrel decline that analysts surveyed by Dow Jones Newswires had forecast. That means there's more heating oil on hand than the market expected.
On the other hand, crude oil supplies grew by 1.1 million barrels last week, less than the 2.7 million barrel increase that analysts expected. And gasoline inventories rose by 1.7 million barrels, slightly below forecasts.
U.S. light, sweet crude for March delivery fell 16 cents to $92.62 on the New York Mercantile Exchange but alternated frequently between positive and negative territory.
March heating oil futures rose 0.25 cents to $2.5936 a gallon on the Nymex, and March gasoline futures rose 0.26 cents to $2.3706 a gallon.
Demand for gasoline rose by 104,000 barrels last week, but was up only 0.4 percent over the last four weeks compared to the same period last year, the EIA said. Most analysts consider a year-over-year increase of 1.5 percent to be normal.
The tepid demand report came on the same day the International Energy Agency cut its oil demand forecasts for this year due to the weakening U.S. economy. The agency, an energy policy adviser to mostly Western industrialized nations, said world oil demand will grow by 1.7 million barrels a day this year, rather than by the 1.98 million barrels a day it forecast in January. Global consumption of crude oil is now expected to average 87.6 million barrels a day this year, up 1.9 percent from 2007 but down from the 2.3 percent increase the agency forecast in January.
"It is becoming clearer that in a slowing economy it will be difficult to maintain these lofty prices over the long run," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago in a research note.
Traders shrugged off Venezuela's announcement that it will halt crude sales to Exxon Mobil Corp. in response to the oil company's court bid to freeze billions of dollars in Venezuelan assets. Most analysts doubt Venezuelan President Hugo Chavez will follow through on his threat to cut off all oil sales to the U.S., noting that such a move would be devastating to the Venezuelan economy.
Other energy futures were mixed Wednesday. March natural gas futures slipped 3.5 cents to $8.401 per 1,000 cubic feet.
In London, Brent crude futures for March delivery rose 12 cents at $92.98 a barrel on the ICE Futures exchange.