MW: Crude tops $55 on inventories anticipation, weaker dollar
Energy futures make broad early advance
Crude-oil futures rose above $55 a barrel Wednesday, gaining as a petroleum industry group reported U.S. crude inventories fell last week and as the dollar moved lower and gave a boost to dollar-denominated oil prices.
Crude stockpiles dropped by 1 million barrels on the week, the American Petroleum Institute said after trading in energy futures had closed Tuesday. Analysts had expected an increase.
In foreign-exchange dealings, the dollar fell after an employment index based on a sampling of ADP payrolls data showed the U.S. private sector lost 491,000 jobs in April, fewer than expected.
Crude for June delivery gained $1.71, or 3.2%, to $55.55 a barrel in early North American electronic trading.
"The API report showed a surprise draw in crude, so market participants will be eagerly awaiting the U.S. EIA inventories report," said Nimit Khamar, analyst at Sucden Financial Research.
The Energy Department's Energy Information Administration will release its weekly report on supplies, typically more closely watched by the markets than the API survey, later Wednesday morning. Analysts surveyed by energy information provider Platts expect buildups in both crude and gasoline inventories, of 2.2 million barrels and 750,000 barrels, respectively.
The EIA and the API use different criteria for gauging inventory levels.
Last Wednesday, the EIA reported that crude stockpiles stood at 374.7 million barrels in the week ended April 24, the highest level since September 1990. The agency also reported that U.S. refineries reduced their production in the face of weak demand.
Also factoring in to Wednesday's energy trading, the better-than-projected ADP index for private-sector employment comes two days before the government releases its estimate of April nonfarm payrolls. Economists surveyed by MarketWatch are looking for payrolls to drop by 580,000 in the government survey, which would be the smallest decline since October. See full story.
As for the dollar, it eased against most of its major rivals as investors opted for riskier but higher-yielding currencies. The dollar index was lately off 0.1% to $83.905.
Also in energy trading, June reformulated gasoline rose 4.25 cents, or 2.6%, to $1.6137 a gallon and June heating oil added 3.5 cents, or 2.5%, to $1.4612 a gallon.
Natural gas for June delivery rose 11.9 cents, or 3.3%, to $3.734 per million British thermal units.
