MW: Crude futures seesaw as inventories report shows build
International Energy Agency lowers daily oil-demand forecast for 2010
By Claudia Assis & Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) -- Crude-oil futures traded slightly above $76 a barrel on choppy trading Wednesday, following a report that showed another increase in oil stockpiles and as the International Energy Agency lowered its demand forecast for the year.
Crude for June delivery gained 2 cents to $76.39 a barrel on the New York Mercantile Exchange. Crude, which ended down 0.6% on Tuesday, has fluctuated throughout the session.
The Energy Information Administration report showed an increase of 1.95 million barrels in the nation's oil inventories, slightly above expectations.
The biggest surprise was a decrease in gasoline inventories by 2.8 million barrels, whereas most analysts were expecting a small increase.
Reformulated gasoline for June delivery, the most active contract, added 2 cents, or 1%, to $2.21 a gallon.
Meanwhile, inventories at Cushing, Okla., the delivery point for Nymex futures, rose by 784,000 barrels to a record high on 37 million barrels.
The premium paid for further-out oil contracts has widened in the past weeks largely due to the Cushing glut and few analysts see any signs of the end of the contango, as the price structure is known.
Crude oil for July delivery was up 23 cents, or 0.4%, to $80.49 a barrel.
Stockpiles of distillates, which include diesel and heating oil, rose by 1.4 million barrels.
The refinery utilization rate dropped more than expected to 88.4%.
IEA lowers demand forecast
In its latest revision, the International Energy Agency lowered by 220,000 barrels a day its forecast for global oil demand for 2010. Oil demand is estimated to grow from 2009 by 1.9%, equating to 1.6 million barrels a day, to 86.4 million barrels a day.
Crude demand has been stronger than anticipated in North America and the Pacific, but somewhat weaker in Asia and the Middle East.
"As made clear by Greece's financial travails, the economic recovery is at risk of drowning in an ocean of public debt, at least in some OECD countries," the Paris-based IEA said in its monthly report.
Elsewhere on Globex, gold futures hit a record high on Wednesday, trading around $1,238 an ounce. Read more on gold.
The dollar index (DXY 84.53, +0.06, +0.08%) , which measures the greenback against a basket of six currencies, rose 0.2% to 84.60. Energy traders key on the action in foreign exchange because prices are denominated in dollars.
