MW: Oil adds to loss after surprise supply increase
Concerns about Isaac fade as hurricane makes landfall
By Claudia Assis and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures slipped further Wednesday after a weekly government report showed a surprise increase in inventories, and as concerns about Hurricane Isaac eased after the storm made landfall.
Crude for October delivery CLV2 -1.19% lost $1.36, or 1.4%, to trade at $94.93 a barrel on the New York Mercantile Exchange.
The Energy Information Administration reported an increase of 3.8 million barrels in crude stockpiles for the week ended Aug. 24.
The report showed a smaller increase in crude supplies than Tuesday’s report by the American Petroleum Institute, but one that nonetheless contrasted with expectations of a decrease of 2 million barrels on the week, according to analysts polled by Platts.
The EIA also reported gasoline inventories down 1.5 million in the week, and distillates up 900,000 barrels.
The analysts surveyed by Platts had expected gasoline inventories to decline 2 million barrels and supplies of distillates to be unchanged.
Gasoline and heating oil futures turned lower after the report, with September gasoline RBU2 -0.99% down 1 cent, or 0.4%, to $3.11 a gallon.
September heating oil HOU2 -0.16% declined 1 cent, or 0.5%, to $3.11 a gallon.
Hurricane Isaac came ashore late Tuesday in southern Louisiana, and traders expect “oil production in the Gulf of Mexico will quickly return to normal,” analysts at Commerzbank said in a note to clients.
Also weighing on trading Wednesday, nations that form the Group of Seven leading industrialized economies late Tuesday asked producers to hike output, citing the risks to the global economy from higher oil prices.
Meanwhile, September natural-gas futures NGU2 +0.23% were flat at $2.61 per million British thermal units.
The EIA is expected to report on natural-gas inventories on Thursday. Analysts at Prestige Economics expect an increase around 65 billion cubic feet.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
