31 May 2007 - 18:42
  • News Code: 106030
Oil Turns Higher As Crude Supplies Fall

NEW YORK -- Oil prices rebounded Thursday after the government said refineries failed to increase output and crude supplies posted a surprise decline.

U.S. crude for July delivery rose 11 cents to $63.60 a barrel on the New York Mercantile Exchange. Oil traded 44 cents lower just prior to the report"s release.


In its weekly inventory report, the Energy Information Administration said crude supplies fell by 2 million barrels. Analysts were looking for a gain of 700,000 barrels, according to Reuters.


Refineries ran at 91.1 percent capacity, unchanged from last week and below what analysts had expected.


Gasoline supplies, closely watched as the summer driving season gets under way and running low all year, rose by 1.3 million barrels, in line with estimates.


Distillates, used to make heating oil and diesel fuel, rose by 100,000 barrels. Analysts were looking for a gain of 700,000 barrels.


A spate of refinery problems has led to low gasoline stocks this year, helping push retail gas prices to all time highs, even adjusted for inflation.


But over the last week prices have cooled a bit as refineries have run at greater capacity and gas supplies have begun to increase.


The average price for a gallon of regular is now $3.191, down from a record high of 3.227 hit last week, according to the motorist organization AAA.


Crude prices have also fallen over the past few days as a truce appears to be taking hold after the swearing in of the Nigerian president and the U.S. and Iran engage in high level diplomatic talks. 



News Code 106030

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