Tuesday, October 5, 2010

Crude Oil Inventories Climb as Refinery Processing Drops

U.S. oil supplies probably rose last week as refineries undergoing seasonal maintenance cut their processing rates to the lowest level since April, reducing demand for crude, a Bloomberg News survey showed. Stockpiles gained 400,000 barrels, or 0.1 percent, from 357.9 million, according to the median of 13 analyst estimates before an Energy Department report tomorrow. Gasoline stocks were unchanged in the survey and distillates fell.

Oil prices climbed above $80 a barrel to the highest level in eight weeks after the Energy Department last week reported declines in supplies of gasoline and distillate, including heating oil and diesel. Oil stocks were 13 percent higher than the five-year average in the week ended Sept. 24. “We’re in the heart of maintenance season, so we’d expect a little bit of an increase in crude and a little bit of a drop in products,” said Phil Flynn, a Chicago based analyst and trader with investment adviser PFGBest. “Refinery runs are going to continue to be low.”

Refineries probably operated at 85.3 percent of capacity, down 0.5 percentage point from the previous week, according to the Bloomberg survey. That would be the lowest level since the seven days ended April 2. Rates dropped 2 percentage points in the week ended Sept. 24, compared with a forecast decline of 0.6 percentage point. Eight analysts forecast oil supplies increased last week, four projected a decline and one said there would be no change.....Read the entire article.

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