Business | Oil & Gas
Oil nears $123 as US stocks fall
Oil rebounded from lows to near $123 a barrel on Wednesday after US government data showed a drop in gasoline stocks last week, surprising analysts who had expected an increase.
- Reuters
- Published: 00:02 July 31, 2008
London: Oil rebounded from lows to near $123 a barrel on Wednesday after US government data showed a drop in gasoline stocks last week, surprising analysts who had expected an increase.
The US Energy Information Administration said gasoline inventories fell by 3.5 million barrels compared with forecasts of a 200,000 barrel build, as US gasoline production dropped and imports fell.
"The report offers the bulls more potential than they have had over the last few weeks," said Rob Kurzatkowski, futures analyst at OptionsXpress in Chicago.
US crude rose 83 cents to $123.02 by 1519 GMT, recovering from a low of $120.80 earlier in the session and well clear of a low of $120.42 on Tuesday, the lowest since May 6. European benchmark London Brent rose 56 cents to $123.27.
The EIA said US crude oil stocks dropped by 100,000 barrels, 1.5 million less than the fall analysts had expected, while distillate stocks rose 2.4 million barrels, 500,000 barrels more than expected.
"However, the rest of the report looks bearish, with crude stocks dropping less than expected and with distillates increasing more than anticipated," said Jim Ritterbusch, president of Ritterbusch & Associates.
Oil has slid from a record high of $147.27 on July 11, the steepest drop from a high since early 2007, pressured by signs that costly fuel and an economic slowdown are curbing demand, especially in the US.
A cut to supply in Nigeria and tension over Iran's nuclear programme limited oil's decline.
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