Oil prices increased Wednesday even though U. S. supplies swell and Americans cut way back on energy consumption. Government data shows the United States is using the least amount of petroleum in a decade.
Benchmark crude for June delivery rose 30 cents to settle at $48.85 US a barrel on the New York Mercantile Exchange. In London, Brent prices fell by a penny to settle at $49.81 a barrel on the ICE Futures exchange.
Oil stocks have been building for months, and traders are less surprised by record surplus numbers than they were a few months ago. Recently, crude prices have shadowed the stock market as investors look for other signs of economic recovery. The Dow Jones industrial average and Standard & Poor's 500 index both closed lower Wednesday after trading up for most of the day amid mixed corporate earnings reports. While Morgan Stanley had a wider-than- expected loss for the first quarter, AT&T Inc., Boeing Co. and McDonald's Corp. results were more upbeat.
``Everybody's focused on the stock market,'' Alaron analyst Phil Flynn said. ``Heavy oil supplies have been priced in somewhat.''
Crude prices dipped earlier in the day after the Energy Information Administration reported that U. S. storage tanks are flush with the most oil since Sept. 14, 1990. Government data also showed that the country is using much less gasoline, diesel fuel, heating oil and other petroleum products.
For the week ended April 17, petroleum consumption dropped by more than two million barrels per day, compared with the same period last year. The four-week average use of 18.5 million barrels per day is the smallest draw since May 1999.
