U.S. News

Crude Oil Breaks 4-Day Losing Streak


U.S. crude oil futures rose on Thursday, snapping a four-day losing streak after government data showed a huge crude stock drawdown last week which extended a decline in supplies for the fifth week in a row.

The price of a barrel was still down around $2 this week due to mild winter weather in the world's top energy consumer.

Heating oil and RBOB gasoline futures ended with small gains, despite inventories rising for a second consecutive week.

"Bottom line, total petroleum inventories showed a net decline of 7.4 million barrels so that's more upward pressure on price," said Tim Evans, analyst at Citigroup in New York.

January refined products contracts expire on Friday.

The U.S. Energy Information Administration said that for the week ending Dec. 22, U.S. crude stocks fell by a much larger than expected 8.1 million barrels to 321 million barrels, against analysts' expectations in a Reuters poll of a 1.8 million barrel decline.

EIA Data Interpreted

Despite declining for the fifth week in a row, stocks are still above the upper end of the average range for this time of the year, the EIA said. However, the drawdown created a deficit of 2.3 million barrels from the year-ago level, wiping out a surplus of more than 6 million barrels the week before.

The Midwest had the biggest crude stocks decline. In the Gulf Coast, where the nation's refinery row sits, there was a slight inventory increase.

Crude oil imports rose 227,000 barrels per day to 9.1 million bpd, but remained below normal due to fog-related delays in the Gulf Coast. Refinery runs edged up 0.2 percentage point to 90.9% of capacity.

Distillate stocks gained 500,000 barrels to 133.6 million barrels, just above the 400,000 barrel average forecast in the Reuters poll. Diesel fuel stocks rose 1.3 million barrels, but heating oil supplies fell 800,000 barrels.

Distillate production increased slightly while demand rose a little to 4.34 million bpd from 4.33 million the prior week.

Gasoline supplies jumped 3.0 million barrels to 203.9 million barrels, against forecasts for a 700,000 barrel rise.

Gasoline production rose a little while demand fell to 9.2 million bpd from 9.5 million bpd.

The warmer-than-normal temperatures that have undercut U.S. heating fuel demand since autumn will likely linger in the northern part of the country for the rest of the winter, private weather forecaster WSI Corp. said Tuesday, joining the U.S. National Weather Service's earlier similar forecast.

Heating load in the U.S. Northeast region was forecast to average below normal for the next five days, with the six- to 10-day forecast for temperatures to average above normal, private forecaster DTN Meteorlogix said on Thursday.

NYMEX January crude resistance was at $62, with support at $60.20.

Heating oil's resistance was charted at $1.70. Support was at $1.60. RBOB's resistance was pegged at $1.60, with support at $1.50. Gasoline resistance also was slated at $1.60, with support at $1.50.