Newspaper article THE JOURNAL RECORD

Oil Futures, Spot Prices Increase

Newspaper article THE JOURNAL RECORD

Oil Futures, Spot Prices Increase

Article excerpt

NEW YORK -- Oil futures rose as traders bought contracts on speculation that a key industry report may show an unanticipated drop in refinery output or rise in gasoline demand.

The report, from the American Petroleum Institute, is generally expected to show inventory gains last week, which normally would weigh on prices. Traders, though, pushed October crude oil futures above $19.45 a barrel, attracting buying from speculators who use historical price patterns as a guide to trading, brokers said.

The report was scheduled to be released late Tuesday. A larger-than-expected drop in refinery operations last week could lead to smaller gains in gasoline and heating oil inventories than analysts expected. Gasoline inventories also could rise less than expected if motorists used more fuel last week than anticipated. "People are buying ahead of the API since they don't want to be surprised" by price-strengthening inventory changes, said Steve Bellino, a senior trader at ABN Amro Chicago in New York. Falling gasoline demand "is what is anticipated at this time of year. My question is when are the refineries going to tone down their (operating) rates." October crude oil rose 34 cents, or 1.8 percent, to $19.61 a barrel on the New York Mercantile Exchange. October heating oil rose 1.33 cents, or 2.5 percent, to 53.85 cents a gallon. Spot prices were raised 50 cents per barrel on Tuesday by Phillips 66, Koch Oil and NGC Oil Trading & Transportation. The increase raised Oklahoma Sweet and West Texas Intermediate to $17.50 a barrel. In other Nymbex trading, October gasoline rose 0.82 cent, or 1.4 percent, to 59.04 cents a gallon. Tuesday's API report is expected to show gains in inventories of gasoline and heating oil and a drop in gasoline demand, according to a Bloomberg survey of analysts. Prices rose, even though "there's no fundamentally positive reason," said John Saucer, an analyst at Smith Barney Inc. in Houston. "People did cover their positions. Sometimes people might do that as a precaution, just because you don't know what the report is going to say." "Remember too," Saucer said, "that the market was at the bottom of its recent ranges on gasoline, and heating oil, too. …

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