Trade group says supplies down 4.8 million barrels; EIA to report
By Claudia Assis and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures traded higher Thursday, recouping the previous session’s losses as traders looked for official word on inventories after a trade group showed a surprise decline.
Crude for February delivery CL2G +0.72% advanced 77 cents, or 0.8%, to $101.37 a barrel on the New York Mercantile Exchange.
Oil briefly traded under $100 a barrel on Wednesday, ending the day off 0.1% after the Obama administration rejected a TransCanada Corp. TRP -0.19% CA:TRP -0.74% request for permit to build a Canada-to-Texas pipeline. Read more on pipeline plans.
After floor settlement, the American Petroleum Institute reported that crude-oil inventories declined 4.8 million barrels in the week ended Jan. 13.
The gain was unexpected, as analysts polled by Platts had forecast a 2.6-million-barrel rise in inventories. Read more on API report.
The report came ahead of the more closely watched U.S. Energy Information Administration report, due out on Thursday.
A slightly softer U.S. dollar also helped support crude prices, with the dollar index DXY -0.13% slipping to 80.338 from 80.540 late Wednesday in North American trade. Read more on currencies.
A weaker dollar tends to support oil and other dollar-denominated commodities as it makes them less expensive for holders of other currencies.
Oil futures trimmed gains after manufacturing activity in the Philadelphia area rose less than the market expected. The index edged up to 7.3 in January, from 6.8 in December. Economists polled by MarketWatch had expected an increase to 9.3.
Oil lost ground Wednesday session in New York, weighed by a White House decision to reject a proposed oil pipeline from Canada. Read more on Wednesday’s oil moves.
Late Wednesday, Morgan Stanley raised its oil price targets for the first quarter on geopolitical risks, citing tensions in the Middle East. See report on Morgan Stanley oil forecast.
Other energy futures moved in line with crude’s advance. February heating oil HO2G +0.76% rose 2 cents, or 0.7%, to $3.04 a gallon. February gasoline RB2G +0.23% edged less than a cent higher to $2.84 a gallon.
February natural gas NG12G -2.31% kept hovering at its lowest levels in nearly a decade. The contract declined 5 cents, or 2.2%, to $2.46 per million British thermal units. On Wednesday, natural gas hit its worst settlement since March 2002.
The EIA is also expected to report on natural gas supplies on Thursday. Analysts polled by Platts expect a decline between 88 billion cubic feet (Bcf) and 92 Bcf for the week ending Jan. 13.
A draw within those expectations would compare with a 228-Bcf withdrawal during the corresponding week of last year, Platts said.
