MTECHTIPS;-Oil up after gasoline stock draw, but market bloated
MTECHTIPS:-Oil prices rose on Thursday after an unexpected draw in U.S. gasoline inventories pointed to higher demand in the world’s biggest oil market, although bloated crude supplies meant that fuel markets remain under pressure. Benchmark Brent crude (LCOc 1) was up 60 cents a barrel at $55.72 per barrel by 1435 GMT. U.S. light crude (CLc 1) was 80 cents higher at $53.14 a barrel. The U.S. Energy Information Administration (EIA) said on Wednesday gasoline inventories fell by 869,000 barrels last week to 256.2 million barrels, versus analyst expectations for a 1.1 million-barrel gain. [EIA/S] The fall in gasoline stocks suggested U.S. consumption was stronger than expected, and may be healthy enough to support prices at time when most fuel oil markets are very well stocked. “U.S. gasoline draws are supporting prices today,” said Tamas Varga, senior analyst at London brokerage PVM Oil Associates. “They are an indication of stronger U.S. demand.” The EIA report also said U.S. commercial crude inventories rose by 13.8 million barrels to 508.6 million barrels, well above analysts’ forecasts. U.S. bank Goldman Sachs (NYSE:GS) said high fuel inventories and rising U.S. crude production meant oil markets would be over-supplied for some time, but that they would drain gradually. “We do not view the recent excess U.S. builds as derailing our forecast for a gradual draw in inventories, with in fact the rest of the world already showing signs of tightness,” the bank said in a note to clients.
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