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Crude futures rise from near 7-week lows Analysts: crude not expected to slip below $50 a barrel; prices down after Department of Energy said crude supply up for 9th week George Jahn Associated Press Writer
Crude prices rose April 14 from near seven-week lows reached after a U.S. government report showed an increase in the country’s crude oil and gasoline stocks.
Noting the upward trend as the trading day progressed, analysts said that — barring unforeseen news — oil was not expected to slip below the $50 level.
Light, sweet crude for May delivery was up 18 cents at $50.40 per barrel by late morning in Europe in electronic trading on the New York Mercantile Exchange. Despite April 13’s $1.64 decline to settle at $50.22 — the lowest closing price since Feb. 18 — the commodity remains about 35 percent higher than a year ago.
Heating oil was up by more than a cent at $1.4540 a gallon, while unleaded gas rose less than half a cent to $1.4870 a gallon.
In London, Brent crude was up 47 cents at $50.95 on the International Petroleum Exchange.
Oil prices fell April 13 after the U.S. Department of Energy said the nation’s supply of crude oil grew the week of April 4 by 3.6 million barrels to 320.7 million barrels, or 8.7 percent above year ago levels. It was the ninth straight week in which U.S. oil inventories increased.
Gasoline inventories increased by 800,000 barrels to 213.1 million barrels, or 5.8 percent above year-ago levels, the agency said. The supply of distillate fuel, which includes heating oil and diesel, slipped by 100,000 barrels to 104.0 million barrels, less than 1 percent above year ago levels. Nymex crude futures down Nymex crude futures have fallen by roughly 14 percent since reaching an intraday high above $58 a barrel April 4, after the Paris-based International Energy Agency April 12 forecast slower demand growth in 2005.
“The facts are right now we haven’t seen any signs that demand is slowing. Nonetheless the rumor of slowing demand is now being sold,” said Phil Flynn, an analyst with Chicago-based Alaron Trading Corp. on its Web site.
In Vienna, analyst Ehsan Ul-Haq of PVM GmbH energy consultants suggested prices would not test the US$50 level, despite the push-pull of positive and negative market undercurrents.
“Bullish factors are that demand in Asia remains strong, despite high prices,” he said. “Negative is that oil stocks are rising.”
He suggested the upward trend would prevail, predicting even more demand in Asia after refining capacities now out for maintenance come back on line by June or July.
Energy traders have been skittish all year because of rising demand in the United States and China, and because of the world’s limited excess production capacity, which they say leaves the oil market more vulnerable than usual to supply disruptions.
Global demand will average more than 84 million barrels a day, according to various industry estimates, while spare output capacity is believed to be about 1.5 million barrels.
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