Oil prices rebound slightly

The Associated Press

Oil prices rebounded slightly Sept. 21 as bargain hunters snapped up futures contracts discounted the day before following a surge in U.S. distillate supplies.

“Some market participants think it’s a buy opportunity,” Victor Shum, energy analyst with Purvin & Gertz in Singapore, said of the rise.

Light sweet crude for November delivery rose 21 cents to $60.95 a barrel in electronic trading on the New York Mercantile Exchange at midday in Europe. November Brent crude on London’s ICE futures exchange rose 15 cents to $60.53 a barrel.

In other Nymex trading on Sept. 21, natural gas futures fell 22.1 cents to $4.710 per 1,000 cubic feet, unleaded gasoline futures rose 0.36 cent to $1.4707 a gallon, and heating oil futures rose 1.22 cents to $1.6600 a gallon.

The benchmark Nymex oil price on Sept. 20 briefly fell below $60 a barrel — the level OPEC has hinted could initiate an output cut. The October crude futures contract, which expired Sept. 20, settled $1.20 lower at $60.46 a barrel, after the U.S. government released data showing healthy crude inventories and a surge in domestic supplies of distillate fuels, which includes diesel and heating oil.

Shum said the price drop was not unusual, as this time of year usually represents a seasonal lull in pricing between the end of the U.S. summer peak driving season and the start of the winter months in the United States and Asia, when demand for heating oil picks up.

Crude oil futures have fallen more than 20 percent over the past two months as worries ease about supply threats and amid speculation possible economic weakness in the U.S. could soften energy demand.

In its weekly report, the U.S. Energy Department said the nation’s inventory of distillates grew by more than 4 million barrels, a sign that refiners are ramping up output of refined products that will be in greater demand in the coming months and therefore command higher prices than gasoline.

Gasoline inventories increased by 600,000 barrels to 207.6 million barrels, or 6 percent above year-ago levels. Crude oil inventories declined by 2.8 million barrels to 324.9 million barrels — but that’s still 5 percent more than last year and well above the five-year average for this time of year.