Oil futures prices rallied in early trading today, probably heading above $30/bbl again with news of a 2.14 million bbl drop in US crude stocks last week to a total 282.6 million bbl.
The September contract for North Sea Brent was up 83� to $29.73/bbl in early afternoon trade on the International Petroleum Exchange in London. That's on top of a 38� gain to $28.90/bbl in quiet trading Tuesday. The market's bullish sentiment could swiftly push past the $30 level, analysts said.
The London market rally was sparked by an American Petroleum Institute report late Tuesday that showed lower US petroleum inventories across the board, despite production increases by Saudi Arabia. The rally, in turn, triggered stop-loss technical buying.
Energy futures advanced in light trading on international markets Tuesday as traders awaited the API report, issued after the close of the New York Stock Exchange.
On the New York Mercantile Exchange, the September contract for NYMEX crude gained 21� to $29.12/bbl Tuesday, while the October contract was up 22� to $28.87/bbl. Prices for both contracts rose sharply in after-hours electronic trading to $29.97/bbl and $29.52/bbl, respectively.
The September contract for unleaded gasoline jumped 1.48� to 86.28�/gal Tuesday, while home heating oil for the same month gained 1.62� to 79.83�/gal. The September natural gas contract increased 6.1� to $4.41/Mcf.
On the IPE, the September gas contract was down 18� Tuesday to the equivalent of $2.32/Mcf.
The API said gasoline inventories declined by 1.67 million bbl last week to a total 205.85 million bbl. Distillate stocks, including home heating oil, fell by 1.18 million bbl to 111.35 million.
The price of the Organization of Petroleum Exporting Countries' basket of seven crudes stood at $26.75/bbl Tuesday, compared with $26.61 the previous day.
