U.S. reports decrease in weekly stockpiles, but prices keep at six-week lows By Claudia Assis and Kate Gibson, MarketWatch SAN FRANCISCO (MarketWatch) -- Crude-oil futures fell to six-week lows Wednesday, retreating after a government report showed a decrease in inventories that was still viewed as bearish for prices. Crude for September delivery lost $1.85, or 2.4%, to $73.89 a barrel on the New York Mercantile Exchange. A close near that level would be the lowest since early July. Oil prices had pared some of their losses immediately after the Energy Information Administration report, but they then fell harder as traders parsed the information and didn't like what they saw. The EIA said inventories declined by 800,000 barrels, shallower than the drop forecast by some analysts but received as good news after a trade group reported an increase of 5.9 million barrels in inventories for the same week. The EIA also reported gasoline stockpiles "virtually unchanged" for the week and an increase of 1.1 million barrels for distillates, which include heating oil and diesel. Analysts polled by Platts had expected a decline of 2.25 million barrels for oil inventories, and a decline of 1.6 million barrels for gasoline. They also had forecast stocks of distillates to drop by 1.4 million barrels. "Prices could get a boost from the failure of the data to confirm the more bearish (American Petroleum Institute) numbers, but we'd still characterize the numbers as soft, with rising total petroleum inventories and the failure to draw down gasoline stocks still sending a bearish message," said analyst Tim Evans, with Citigroup's Citi Futures Perspective, in a note to clients. The Washington-based API issued its weekly inventories update late Tuesday. Demand is simply not there, said Tariq Zahir, a managing member with Tyche Capital Advisors. "With demand still not coming back and the persistent questions on the worldwide economic recovery we feel the entire energy complex will take another leg lower in the upcoming days," he said. Specifically, Zahir said he sees oil first testing $73.85 "and then head towards the 70 level in the days to come." But it would be "wrong to paint a universally bleak economic picture," as emerging-market economies continue to perform strongly, analysts at J.P. Morgan said in a note, citing India as an example. "Nevertheless, growing concerns about developed-market economies is arguably reflected in diminishing risk appetite, and this continues to weigh on oil prices," they said. Crude prices had rebounded Tuesday from a six-session losing streak, adding 53 cents to end at $75.77 a barrel. Also Wednesday, gasoline futures dropped 4 cents, or 1.6%, to $1.92 a gallon. Natural-gas futures bucked the trend, adding a penny, or 0.2%, to $4.28 per million British thermal units. Adding to the pressure on energy products and other commodities, the dollar was stronger, recovering from the past sessions. An appreciating greenback makes dollar-denominated commodities more expensive for holders of other currencies, diminishing their investment appeal. The dollar index (DXY 82.18, -0.05, -0.06%) , which tracks the performance of the U.S. unit against a basket of six major currencies, added 0.1% to 82.29. See Currencies for more.

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