MW: Crude reverses to gains; stocks, home sales provide boost
By Claudia Assis & Nick Godt, MarketWatch
SAN FRANCISCO (MarketWatch) -- Crude-oil futures gained Wednesday as some of the concerns about global demand for energy and the world's economic recovery dissipated after a better-than-anticipated report on home sales and a recovery in U.S. stocks.
Crude oil for July delivery, the most active contract, rose 27 cents, or 0.3%, to $72.83 a barrel on the New York Mercantile Exchange.
Oil got a little boost from U.S. stocks moving modestly higher, as well as a rise in pending home sales index by 6% in April after an upwardly revised 7.1% increase in March.
The picture, however, is still bearish, and oil made a couple of forays into negative territory in early trading Wednesday.
"You have a little support from stocks, but I don't see much improvement in demand ... and we are still oversupplied," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill.
Prices for further-out contracts are trading at a premium, a price structure known as contango. That's "a bearish signal," Ritterbusch said.
Crude oil for August delivery traded 66 cents higher, or 0.8%, at $74.57 a barrel.
In currency trading, the dollar made gains, particularly against Japan's yen. The dollar index (DXY 86.98, +0.34, +0.39%) , which compares the greenback to a basket of six currencies, rose 0.4% to 86.99.
Energy products were higher on Wednesday. Reformulated gasoline for July delivery gained 3 cents, or 1.5%, to $2.01 a gallon. Natural gas for July delivery added 5 cents, or 1.1%, to $4.29 per million British thermal units.
The American Petroleum Institute, a Washington-based trade group, is scheduled to release its data on oil inventories at 4:30 p.m. Eastern.
The more closely watched Energy Department's report on oil inventories is slated for release Thursday at 11 a.m. Eastern, a day later than its regular schedule due to Monday's Memorial Day holiday.
Analysts polled by Platts expect crude stockpiles to decline 1 million barrels. Gasoline stocks are expected to increase 750,000 barrels, while stocks of distillates -- which include heating oil and diesel -- are estimated to increase by 950,000 barrels.
The DOE's Energy Information Administration is scheduled to release its data on natural gas in storage on Thursday at 10:30 a.m. Eastern.
Crude futures fell 2% on Tuesday as lingering concerns about global demand for energy outlasted bouts of optimism following positive U.S. macroeconomic data.
