10 May 2007 - 11:09
  • News Code: 104270

NEW YORK -- Oil prices fell more than $1 Wednesday on a U.S. inventories report showing the first rebound for gasoline stocks in three months.

The increase could relieve pressure on U.S. retail gasoline prices, which have risen to near-record levels ahead of the summer driving season.

 

Inventories remain well below levels a year ago, however, and persistent problems at the nation"s refineries and escalating violence in Nigeria"s oil region could drive prices still higher.

 

Marking the first increase in 13 consecutive weeks, gasoline stocks rose an average of 400,000 barrels last week to 193.5 million barrels, slightly ahead of analyst expectations.

 

"Overall, the same problems that drove gas prices to record highs haven"t gone away," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "The big picture for today is still scary."

 

Light, sweet crude for June delivery fell $1.16 to $61.10 a barrel in afternoon electronic trading on the New York Mercantile Exchange (Nymex). June Brent crude dropped $1.01 to $64.53 a barrel on London"s ICE Futures exchange.

 

Gasoline futures slipped 1.45 cent to $2.1900 a gallon.

 

Meanwhile, the nationwide average price for regular unleaded was $3.03 per gallon Wednesday, up from $2.78 last month and $2.90 last year, according to AAA"s daily survey of self-serve stations.

 

Drivers could enjoy relief at the pump within weeks if crude prices continue to drop, though the upcoming switch to costlier summer gas blends will eat into any markdowns, Flynn said.

 

Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline supplies. At least a dozen additional partial shutdowns have occurred in the U.S. and internationally that cut refining capacity.

 

The inventories report also showed crude oil stocks increased by 5.6 million barrels, or 1.7 percent, to 341.2 million barrels for the week ending May 4.

 

Stocks of distillate fuel, which includes diesel and heating oil, rose by 1.7 million barrels to 118.8 million barrels.

 

Earlier Wednesday, oil prices rose following the armed seizure of four American workers in Nigeria, heightening supply worries in the energy market.

 

The attackers, carrying assault rifles and rocket-propelled grenades, stormed a vessel carrying the workers in the southern Niger Delta minutes before midnight on Tuesday, two industry officials told The Associated Press.

 

The latest kidnappings — following dozens last week — came just hours after militants staged coordinated attacks on three pipelines in the wetlands region, knocking out tens of thousands of barrels of crude oil and keeping global supply fears alive.

 

Nigeria is Africa"s largest producer of crude, one of the top 10 exporters in the world and a leading supplier of oil for the United States.

 

In other Nymex trading, heating oil futures fell 3.70 cents to $1.7929 a gallon, and natural gas prices rose 2.3 cents to $7.660 per 1,000 cubic feet.

 

PIN/AP

News Code 104270

Your Comment

You are replying to: .
2 + 9 =