Crude oil and gasoline fell to five week lows after a U.S. government report showed inventories of the motor fuel rose to a 22 month high. Oil dropped as much as 2.8 percent after the Energy Department said that gasoline supplies climbed 1.99 million barrels to 229.4 million last week, the highest level since March 2008. Oil stockpiles tumbled amid expectations that they would increase.
“The crude number was certainly supportive for prices, but the product numbers were negative,” said Tom Bentz, senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “We headed for some new lows and the selling dried up.” Crude oil for March delivery fell $1.45, or 1.9 percent, to $73.26 a barrel at 1:38 p.m. on the New York Mercantile Exchange. Oil touched $72.65, the lowest level since Dec. 21.
Oil supplies dropped 3.89 million barrels, or 1.2 percent, to 326.7 million, the department said. They were forecast to rise 1.5 million barrels in the Bloomberg survey, according to the median estimate of 19 analysts in a Bloomberg News survey. Gasoline stockpiles were estimated to increase 900,000 barrels.
“The only bullish number in today’s report was crude oil, and that was apparently due to the closure of the Houston Ship Channel,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. The Houston Ship Channel, which serves the largest U.S. petroleum port, reopened Jan. 21 after shutting two days earlier because of fog.....Read the entire article.
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