Oct 17 2012 |
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OIL FUTURES: Crude Edges Higher Despite Bearish Inventory Report
Wednesday, Oct 17, 2012
By John M. Biers
NEW YORK--Despite a bearish inventory report, crude futures ended Wednesday higher after rallying on tight distillate inventories.
Nymex front-month oil futures for November delivery settled at $92.12 per barrel, up three cents, or less than 0.1%. Brent crude futures were trading at $113.05, down 95 cents.
Crude had traded in negative territory for much of the session, hitting an intraday low of $91.55 soon after the Department of Energy released its weekly petroleum inventory report. The inventory report was broadly bearish and counteracted good news in other markets about the euro and the U.S. housing market.
Phil Flynn, an analyst with the Price Futures Group in Chicago, said the market's reaction would have been stronger to the distillate figure if it were closer to heating season. But he noted that heating oil futures traded far better than gasoline futures on Wednesday.
Earlier, the oil market had bid crude into negative territory after the inventory report pointed to a build of 2.86 million barrels, more than twice the 1.3 million expected by analysts. Stocks of gasoline also came in as more plentiful than expectations.
The report "reaffirms that overall the petroleum markets are pretty well supplied," said Kyle Cooper, managing partner at IAF Advisors in Houston.
Prior to the report's release, crude futures had traded in positive territory after Moody's Investor Service upheld Spain's credit rating, strengthening the euro relative to the dollar.
Also boosting oil had been surprisingly good U.S. housing data. Housing starts surged 15% higher last month from August, to a seasonally adjusted annual rate of 872,000, the Commerce Department said Wednesday. That was well above the expectations of a seasonally adjusted annual rate of 768,000. Compared with a year earlier, new construction was up 34.8%.
Wednesday's three-cent gain for crude marked the fourth day in a row that crude prices have ended the day barely changed from the prior day's result. Crude futures has settled within a 27-cent range for the last four sessions.
--David Bird contributed to this report.
Write to John Biers at john.biers@dowjones.com
(END) Dow Jones Newswires
October 17, 2012 15:16 ET (19:16 GMT)
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