By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures added to their advance Wednesday, recouping some of their recent steep losses, as a weekly government report showed supplies in line with expectations.
Crude for May delivery (CLK11 106.70, +0.45, +0.42%) added $1, or 1%, to $107.26 a barrel on the New York Mercantile Exchange. That followed Tuesday’s loss of 3.3%, marking oil’s lowest settlement in almost two weeks.
The Energy Information Administration said U.S. supplies of crude increased 1.6 million barrels in the week ended April 8, as expected by analysts polled by Platts.
The EIA reported a decrease for gasoline inventories of 7 million barrels. Distillates supplies fell 2.7 million barrels. Both figures showed deeper declines than forecast. Analysts expected a decrease of 1.3 million for gasoline and unchanged stocks of distillates, which include diesel and heating oil.
Crude futures had traded at $106.55 a barrel before the report.
The report’s “eye-opening” number was unleaded gasoline, said Tariq Zahir, managing member of Tyche Capital Advisors in New York. The large draw was not entirely a surprise, as refiners are undergoing maintenance switching to summer gasoline blends, he added.
Gasoline for May delivery (RBK11 3.22, +0.06, +1.84%) added 6 cents, or 1.9%, to $3.22 a gallon. May heating oil (HOK11 3.20, +0.03, +0.78%) gained 3 cents, or 1%, to $3.21 a gallon.
“The fundamental picture on crude supplies remains bearish. ... Barring a new geopolitical headline, we feel any strength in the energy markets will be short lived,” Zahir added.
On Tuesday, several economists lowered their estimates for first-quarter U.S. growth, and crude prices fell as investors feared reduced economic activity will translate into less need for oil.
In a short-term outlook report released Tuesday, the EIA forecast retail gasoline prices to peak at $3.91 a gallon in early summer and average $3.86 a gallon during the driving season, which started April 1 and will end Sept. 30. Prices averaged $2.76 a gallon last summer.
The agency also projected a 0.5% increase in gasoline consumption compared with the previous summer. With the projected increase in gasoline prices, vehicle fueling costs for the average U.S. household will be $825 higher this year than in 2010. Read more about the forecast for summer gas prices.
