The oil markets took Wednesday morning's inventory report in stride. Oil was down 41 cents to $92.37 per barrel, heating oil fell about one cent to $2.59 per gallon, unleaded gasoline fell one cent to $2.35 per gallon, and natural gas declined about three cents to $8.41 per million BTUs.
Meanwhile, gasoline inventories rose 1.7 million barrels and distillate stocks fell 100,000 barrels. At 301.1 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year.
Refineries operated at 85.1% of their operable capacity last week, up from 84.3% a week earlier.
Trader sees spring oil price decline
Independent energy trader Jim Dietz told BloggingStocks Wednesday the oil market is currently being driven by geopolitical events more than oil demand.
"U.S. oil inventories have risen for the past few weeks, but civil unrest in Nigeria and [Venezuela President Hugo] Chavez's halting shipments to ExxonMobil (NYSE: XOM) are serving to prop up the price," Dietz said. "Without those political events, oil and gasoline continue to trend lower, as I expect they will do so after these incidents are resolved."
Dietz said he is short oil with a monthly contract, after having been stopped-out for a loss with an oil-short daily contract on Tuesday.
Dietz added that he still sees oil testing $75-$80 per barrel and retail unleaded gasoline prices testing $2.75-$2.80 per gallon by early spring.
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Reader Comments (Page 1 of 1)
2-13-2008 @ 4:15PM
Michael Schneider said...
The Hugo Chavez incident was largely thought to be balderdash by the market but today oil, which had been hurt by reduced worldwide demand forecasts, finally moved up as soon as Chavez ordered an oil refinery in Venezuela to immediately stop shipping oil to Exxon. This will probably be a temporary situation but there is an element of uncertainty.
Nigeria may get resolved temporarily but there seems to be continued violence and disruption there.
Some additional comments on today's oil inventory numbers and Hugo Chavez are available free for those interested in Oil Alerts at http://www.Barrelomoney.com.