MW; Oil ignores bearish EIA inventories report to climb higher
Traders cheer stockpile decline in Cushing, Okla., delivery point for Nymex oil
By Polya Lesova & Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) -- Crude-oil futures rose nearly 4% on Wednesday, as investors seemed to focus on the good economic news rather than on a bearish oil inventories report.
Crude for July delivery gained $2.63, or 3.9%, to $71.45 a barrel on the New York Mercantile Exchange. The contract hit an intraday high of $71.57 a barrel, according to FactSet Research.
Crude-oil futures had pared some of their gains immediately following a Department of Energy report showing a higher-than-expected increase in crude-oil inventories, but resumed an upward trajectory shortly after.
The DOE's Energy Information Administration data showed an increase of 2.4 million barrels in the week ended May 21, whereas analysts surveyed by Platts had expected an increase of 100,000 barrels.
Gasoline stocks fell 200,000 barrels, while distillates stocks fell 300,000 barrels, the EIA said. The analysts polled by Platts had expected increases of 150,000 barrels for gasoline and 200,000 for distillates, which include heating oil and diesel.
Heating oil for July delivery rose 5 cents, or 2.90%, to $1.94 a gallon. Reformulated gasoline for July delivery gained 5 cents, or 2.8%, to $1.97 a gallon.
The EIA report "was mixed relative to expectations," said Tim Evans, an analyst with Citi Futures Perspective in a note to clients.
Inventories at the key Cushing, Okla. delivery point for West Texas Intermediate sold on Nymex declined by 324,000 barrels last week, but the total of 37.6 million barrels is still high and represents a 23% increase from this time last year, Evans said.
Oil had started its day focusing on a higher-than-expected uptick for durable goods in April, and also got a small boost from a report showing new-home sales climbed nearly 15% in April.
July crude had ended down 2.1% on Tuesday.
Durable-goods orders were up 2.9% in April, the Commerce Department reported. Airplane demand pushed the overall gain, which was larger than analysts expected.
That EIA report comes on the heels of inventories data reported by the American Petroleum Institute trade group late Tuesday.
"A recovery in the global equity markets and a drop in crude-oil stocks at Cushing could spread signs of optimism across the energy market and could drive oil prices back to the previous range of $70-$75 per barrel," Myrto Sokou, analyst at Sucden Financial Research, wrote in a note.
Also getting factored into energy trading Wednesday, European stocks posted strong gains and U.S. stocks also rose in early action.
In the currency markets, the euro (CUR_EURUSD 1.2213, -0.0158, -1.2771%) was once again under selling pressure. It fell 0.7% to $1.2268. The dollar index (DXY 87.07, +0.29, +0.34%) , which compares the greenback to a basket of six currencies, rose 0.2% to 86.95.
