MW: Oil falls, giving back some Election Day gains
Oil market analyzes presidential choice; U.S. crude supply unchanged
WAHSINGTON (MarketWatch) - Crude-oil futures fell below $70 per barrel Wednesday, giving up some ground after soaring more than 10% in the prior session as traders digested the outcome of the U.S. presidential election and a government report that revealed no change to crude supplies and refinery activity.
Crude for December delivery fell $2.95 to $67.58 a barrel in electronic trading on Globex.
"Crude prices were lower amid profit-taking following a sharp rally," wrote analysts at Sucden Research in a report.
On Tuesday, commodities rallied across the board, with December oil surging $6.62, or 10.4%, to close at $70.53 a barrel on the New York Mercantile Exchange.
In a historic election Tuesday, Sen. Obama of Illinois rode massive voter turnout to a sweeping victory over Sen. John McCain, becoming the first African-American elected as the nation's chief executive. Read more.
There's "not much else going on except analyzing the election," said Charles Perry, president of energy-consulting firm Perry Management.
"But as time moves on, Obama was not in favor of off shore and ANWR [Arctic National Wildlife Refuge] drilling, which will leave traders worrying about less supply in the long run," he said.
Phil Flynn, a vice president at Alaron Trading, pointed out in a note to clients that President Obama has said that within 10 years, he will save more oil than we currently import from the Middle East and Venezuela. "He will start to do that, he says, by putting 1 million electric cars on the road -- most of which he envisions being built in America," said Flynn.
That's "assuming of course that our car companies make it and that we may actually start buying cars again, which looks today to be kind of a novel concept," he said.
"But that is all long term. Today, the reality is the global economy is still struggling," Flynn said.
Flat supply
Energy traders also analyzed the latest petroleum supply data from the U.S. Energy Information Administration, which covered the week ended Oct. 31.
Crude supplies were unchanged last week and remained at 311.9 million barrels, the EIA said Wednesday. Data show that crude stocks had climbed nearly 22 million barrels over the last six weeks.
They were up 1.8 million at 309.4 million barrels, according to a separate report Wednesday released by the American Petroleum Institute.
Motor gasoline supplies climbed unexpectedly, up by 1.1 million barrels in the latest week to 196.1 million, according to the EIA.
The API said its tally showed gasoline supplies rose 1.6 million barrels to 195.2 million.
Data on distillate inventories were mixed. Supplies of distillates, which include heating oil, rose 1.2 million to 127.8 million, the EIA said, but they were down 1.9 million at 126.5 million, according to the API.
Against this backdrop, December reformulated gasoline fell 5 cents to $1.4825 a gallon on Globex and December heating oil dropped 7.9 cents to $2.083 a gallon.
Meanwhile, refinery capacity was unchanged at 85.3% of capacity last week, the EIA report showed.
Total demand for petroleum products over the last four weeks averaged almost 19.1 million barrels per day - that's down 6.7% from the same time a year ago, the EIA report said.
