AP News, May 31st, 2007
Gasoline prices at the pump slid again Thursday, while gas futures dropped on a government report that showed inventories were up slightly more than expected.
Crude oil futures, meanwhile, rose after the Energy Department's weekly inventory report showed that oil stockpiles fell.
The nationwide average price for regular unleaded gasoline slid 0.6 cent to $3.191 a gallon on Thursday, down from a record high of $3.227 a gallon a week ago, according to AAA and the Oil Price Information Service.
Gasoline futures and retail prices have moderated in recent days in part on a perception that domestic refining capacity is finally catching up to demand. That perception got a boost from the inventory report from the Energy Information Administration, the Energy Department's statistical arm, which showed that gasoline stockpiles increased by 1.3 million barrels, or 0.7 percent, to 198 million barrels last week, slightly besting analyst expectations.
Gas futures for June delivery oscillated between positive and negative territory soon after the report's 10:30 a.m. EDT release, but fell 2.13 cents to settle at $2.2512 on the New York Mercantile Exchange. Also on the Nymex, light, sweet crude for July delivery rose 52 cents to settle at $64.01 a barrel, though the contract had traded lower for much of the day.
July Brent crude rose 20 cents to settle at $68.04 a barrel on the ICE Futures exchange in London.
The report showed oil inventories fell by 2 million barrels, or 0.6 percent, to 342.2 million barrels last week. Crude inventories were expected to climb.
The report also showed that domestic oil refineries ran at 91.1 percent of their total production capacity on average for the week ending May 25, unchanged from the previous week. Stocks of distillate fuel, which include diesel and heating oil, rose by 100,000 barrels to 120.4 million barrels.
Analysts polled by Dow Jones Newswires predicted that domestic gasoline stocks would rise 1 million barrels last week, while crude oil inventories were expected to climb about 300,000 barrels. Analysts predicted distillate stocks would rise about 500,000 barrels.
Heating oil futures rose 0.72 cent to settle at $1.8827 a gallon on the Nymex, while natural gas prices settled 0.6 cent lower at $7.935 per 1,000 cubic feet. Natural gas in storage in the U.S. grew by 107 billion cubic feet last week, a separate Energy Department report said Thursday.
Analysts said the inventory report showed little has changed in the last week.
"It kind of looks like where we are is what everyone expected," said Kevin Lindemer, executive managing director of Global Insight.
"What's changed? Effectively nothing since last week," concurred Jason Schenker, an economist at Wachovia. "I think the big story in this report are imports."
Gasoline imports averaged 1.61 million barrels a day last week, the third highest weekly average ever, and up from 1.29 million barrels a day the previous week, the report showed. But crude oil imports fell to 10.018 million barrels per day from 10.892 million barrels per day the previous week.
Gas prices at the pump and in futures markets have risen this spring on concerns that refineries simply are not producing enough to meet peak summer demand. Those concerns have been exacerbated by a higher than normal spate of unexpected refinery outages.
Gasoline production has rebounded in recent weeks, but some analysts are concerned that the inventory increases have not been big enough. That has led to a split among analysts, with some speculating prices could head even higher over the next month, while others conclude prices have peaked.
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Associated Press Writers Pable Gorondi, in Budapest, and Gillian Wong, in Singapore, contributed to this report.
