Crude Supplies Fall as Tankers Back Up

Crude-oil inventories fell unexpectedly last week for the second straight period. But government data suggests it is probably not because demand has risen, and that helped push crude prices down.

For the week ended May 23, crude-oil inventories shrank by 8.8 million barrels, down 2.7 percent from the previous week, to 311.6 million barrels, the Energy Department’s Energy Information Administration said in its weekly report. Analysts expected a gain of 750,000 barrels, according to a survey by Platts, the energy research arm of McGraw-Hill Cos.

The EIA, in a rare explanatory note, said the drop in crude inventories was due to temporary delays in unloading oil tankers along the Gulf Coast, where heavy fog has been a problem.

Gasoline inventories fell by 3.2 million barrels. Analysts expected stockpiles of the motor fuel to grow by 400,000 barrels. Demand for gasoline over the four weeks ended May 23 was more than 0.7 percent lower than a year earlier.

U.S. refineries ran at 87.9 percent of total capacity on average, unchanged from the prior week. Analysts expected capacity to rise by 0.5 percentage point.

Inventories of distillate fuel, which include diesel and heating oil, rose by 1.6 million barrels — twice what analysts expected.

In a separate report, EIA said natural gas inventories in the lower 48 states rose by 87 billion cubic feet to 1.7 trillion cubic feet for the week ending May 23 from the previous week.

The level is slightly below the five-year average of about 1.71 trillion cubic feet, and well below last year’s level of 2.02 trillion cubic feet.

Natural gas for July delivery lost 52.1 cents to settle at $11.474 per 1,000 cubic feet on the New York Mercantile Exchange.

At the pump, gas prices rose about a penny overnight to a record high national average of $3.95 a gallon, according to AAA and the Oil Price Information Service. Diesel prices also set a record at $4.79 a gallon.

Source: AP