By Myra P. Saefong and Kristene Quan, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures climbed Wednesday, bouncing back after a recent decline, as Israel and Hamas had yet to reach a cease-fire and data showed an unexpected slide in last week’s crude supplies.
Crude oil for January delivery CLF3 +0.67% rose 53 cents, or 0.6%, to $87.28 a barrel on the New York Mercantile Exchange.
Trading on Nymex will be closed Thursday for Thanksgiving and will hold an abbreviated session Friday.
Wednesday’s gains followed a nearly 3% drop in the previous session as hopes for a Gaza Strip cease-fire relieved some of the concerns over supply risks in the Middle East. See: Oil rallies, ends above $86 to score weekly gain.
Data from the U.S. Energy Information Administration early Wednesday confirmed the surprise decline in last week’s crude inventories that was initially reported by the American Petroleum Institute late Tuesday.
The “EIA numbers were very similar to yesterday’s API numbers with unexpected draws in crude and its products,” said Tariq Zahir, managing member at Tyche Capital Advisors.
If you look deeper in the EIA report, however, stocks in Cushing, Okla., a major trading hub for crude, had an unexpected build of 1.4 million barrels, he said. “We feel that is offsetting the headline numbers” from the EIA report.
Early Wednesday, the EIA reported that crude supplies fell by 1.5 million barrels for the week ended Nov. 16. Analysts polled by Platts expected a 1 million-barrel increase.
Motor gasoline supplies also fell 1.5 million barrels, while distillate stocks dropped 2.7 million barrels, the EIA report said. Analysts had forecast a rise of 1.25 million barrels for gasoline inventories and a fall of 1 million barrels in distillate supplies, which include heating oil.
The API late Tuesday had reported that crude supplies fell 1.9 million barrels last week, and that inventories of gasoline dropped 4.8 million and distillates fell 4.4 million barrels. See: Oil, gasoline, distillate supplies drop: API.
Against that backdrop, heating oil for December delivery HOZ2 +1.13% rose 4 cents, or 1.3%, to $3.08 a gallon, and December gasoline RBZ2 +0.86% also climbed 3 cents, or 1%, to $2.74 a gallon.
Geopolitical boost
Developments in the Middle East between Israel and the Palestinians will remain the key focus, even as trading was thin ahead of the holiday.
“It looks like traders are understandably worrying about the situation in the Middle East before they go on their extended Thanksgiving breaks,” said Matthew Parry, senior oil-market analyst at the Paris-based International Energy Agency.
“Escalations in tensions, between Israel and their neighbors, have added an additional geopolitical price premium to those already in existence, thanks largely to Iran,” he said.
The oil price “pendulum is pushed on the one hand by the geopolitical premium and on the other the creaking macroeconomic backdrop,” he said.
Traders digested somewhat upbeat U.S. economic data.
U.S. initial jobless claims dropped by 41,000 to a seasonally adjusted 410,000 in the week ended Nov. 17, the Labor Department reported Wednesday. Economists polled by MarketWatch expected a fall to 418,000. See: U.S. initial jobless claims drop to 410,000.
Consumer sentiment for November gained slightly to a reading of 82.7, but wasn’t as strong as initially estimated, according to the University of Michigan and Thomson Reuters. See: Consumer sentiment edges up in November.
The Conference Board also said it’s likely that the nation’s economy will expand “modestly” through early 2013. See: Leading economic index rises 0.2% in October.
In other energy trading Wednesday, natural-gas futures for December delivery NGZ12 +0.18% was a penny, or 0.2%, to $3.84 per million British thermal units.
The EIA will release its weekly natural-gas supply report at noon Eastern, a day earlier than usual due to Thursday’s Thanksgiving holiday. Analysts surveyed by Platts expect to see a withdrawal of between 23 billion cubic feet and 27 billion in last week’s inventories.
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
Kristene Quan is a MarketWatch reporter, based in Hong Kong.
