AP
Oil Prices Decline to $76.57 a Barrel
Friday August 3, 6:38 am ET
By George Jahn, Associated Press Writer
Oil Prices Decline to $76.57 a Barrel After Moderate Rise in the Previous Session

VIENNA, Austria (AP) -- Oil prices slipped Friday on mixed interpretations of U.S. fuel stocks data. Still, perceptions that the market was undersupplied pointed to continued near-term upward pressure.

Light, sweet crude for September delivery fell 29 cents to $76.57 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract added 33 cents to settle at $76.86 a barrel Thursday.

September Brent crude dropped 15 cents to $75.61 a barrel on the ICE Futures exchange in London.

Analysts say energy investors are split over the meaning of Wednesday's weekly inventory report from the U.S. Energy Department's Energy Information Administration. The report showed crude oil stocks declined 6.5 million barrels last week, far more than the 690,000-barrel decline analysts surveyed by Dow Jones Newswires had expected.

The report also showed a steep jump in refinery activity and an increase in gasoline inventories. The build in gasoline stockpiles was particularly significant in that it comes at the height of the summer driving season.

U.S. gasoline prices rose to record levels in the spring on concerns the refining industry was not producing enough gasoline to meet summer demand. An unusual number of unexpected refinery outages in the Northern Hemisphere spring and early summer contributed to the price run-up.

Wednesday's U.S. fuel inventories report, though, added to a sense that the refining industry has finally recovered.

Investors initially reacted to the EIA report Wednesday by buying oil on the news of declining crude inventories, sending oil prices to a record Nymex intraday high of $78.77. Meanwhile, gasoline futures fell on the refinery and gasoline inventory news.

As the slide in gasoline futures prices accelerated, oil prices followed.

Still, upward pressure persisted on the market.

"The expectation that OPEC members will not increase output until their scheduled meeting next month, and rumors that the exporting group could keep its production target unchanged after the meeting, are supporting prices," said Vienna's PVM Oil Associates.

Nymex gasoline futures fell slightly at $2.0345 a gallon (3.8 liters), while heating oil prices lost nearly a penny to fetch $2.0660 a gallon. Natural gas prices gained 1.4 cents, selling for $6.12 per 1,000 cubic feet.