By OGJ editors
HOUSTON, Apr. 26 -- Oil prices soared Apr. 25 on reports of a large, unexpected decline in US gasoline inventories and a drop in refinery utilization. Traders question whether refiners can adequately supply summer driving demand.
The US Energy Information Administration released its weekly petroleum inventories report Apr. 24, in which gasoline inventories fell again in the week ended Apr. 20, dropping by 2.8 million bbl to 194 million bbl"well below the lower end of the average range," EIA said (OGJ Online, Apr. 25, 2006).
That is the lowest gasoline inventory since Oct. 7, 2005, when refineries were shut because of hurricanes Katrina and Rita. Refineries operated at 87.8% of capacity, down 2.9% from the previous week, EIA said.
Despite a buildup in crude oil inventories, traders focused on falling US gasoline inventories and lower refinery utilization just before the vacation driving season.
Light, sweet crude for June delivery rose $1.26 before settling at $64.84/bbl on the New York Mercantile Exchange. The July position gained $1.31 to $67.20/bbl.
On the US spot market, West Texas Intermediate at Cushing, Okla., was up $1.22 to $65.12/bbl. Heating oil for May climbed 5.55¢ to $1.90/gal. The May contract for reformulated blend stock for oxygenate blending rose 7.37¢ to $2.28/gal.
The May natural gas contract jumped by 9.1¢ to $7.70/MMbtu on NYMEX. On the US spot market, natural gas at Henry Hub, La., gained 3.5¢ to $7.61/MMbtu.
In London, the June IPE contract for North Sea Brent crude rose $1.41 to settle at $68.57/bbl. The May gas oil contract declined by $3.50 to $590.25/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes decreased by 16¢ to $63.50/bbl on Apr. 25.