U.S. News

Oil Rises to $66 Range; U.S. Gasoline Stocks Increase


Oil was marginally higher on Wednesday after U.S. gasoline stocks rose for a fifth straight week and eased concerns of a summer supply crunch in the world's top consumer.

Losses were limited, however, by disruptions in oil and gas exports from Oman after a cyclone in the Arabian Sea shut loading operations.

U.S. light sweet crude was up, as was London Brent crude , after falling slightly on the U.S. fuel inventory data.

Inventories of U.S. gasoline rose by 3.5 million barrels last week -- well above an anticipated 1.4 million barrel increase, but refineries were running at just shy of 90% capacity.

"The big build in gasoline stocks seems to be the main focus so far, it's had a bearish impact," said Jim Ritterbusch of Ritterbusch & Associates.

"However, I'm not convinced that it's going to stay down. The drop (in oil futures) could easily be mitigated by the drop in refinery runs."

Investors were earlier focused on Cyclone Gonu, the strongest storm to reach Oman in 30 years, which disrupted the country's crude exports of 650,000 barrels per day (bpd) for a second straight day.

It weakened on Wednesday to the equivalent of a Category One hurricane from a maximum-force Category Five, en route to the Strait of Hormuz, a major Gulf oil export route, towards southeastern Iran.

An Iranian oil official said crude shipments of 2.4 million bpd from OPEC's second biggest producer were not expected to be affected.

"We doubt the few days of export delays caused by the storm will, in the end, contribute much to the upside or create measurable disruptions to the system," said Edward Meir of Man Financial Energy Group.

Disruptions to Nigerian oil output and Iran's nuclear dispute with the West remain underlying issues affecting prices.

Some 722,000 bpd of Nigerian production, or about 26% of the country's capacity, remained shut in due to militant attacks and sabotage.