AP
Crude Oil Edges Upward in Europe
Wednesday August 29, 7:07 am ET
By George Jahn, Associated Press Writer
Crude Oil Edges Upward in European Trading on Supply Concerns


VIENNA, Austria (AP) -- Oil prices edged upward Wednesday in anticipation of a report showing declines in U.S. crude and gasoline supplies.
Comments from OPEC that no output increases were needed also supported prices.

Light, sweet crude for October delivery rose 7 cents to $71.80 a barrel by noon in European electronic trading on the New York Mercantile Exchange. The contract dropped 24 cents to $71.73 a barrel Tuesday in the U.S.

Nymex gasoline futures rebounded by just over a penny to $2.0258 a gallon (3.8 liters) in electronic trading after dropping 2.39 cents in the day session.

Gasoline futures have been a main driver of oil prices in recent days. A number of refinery outages rekindled concerns about fuel supplies just as inventory reports have been indicating gasoline demand has remained strong late into the U.S. driving season.

But several of those refinery problems, including a reported outage at Citgo Petroleum Corp.'s refinery in Corpus Christi, Texas, are apparently being resolved.

A crude distillation unit at Valero Energy Corp.'s refinery in Port Arthur, Texas, has also been restarted, although at a lower rate after down time of about a week. And Dow Jones Newswires reported that the processing units at a 330,000 barrel per day Chevron Corp. refinery in Mississippi have returned to service.

Oil prices alternated between gains and losses Tuesday after Abdalla Salem el-Badri, secretary general of the Organization of Petroleum Exporting Countries, told Dow Jones the oil market is well supplied. Many analysts agree, pointing out that crude oil inventories are at record levels. Still, any news that no new oil is about to be introduced into the market tends to have bullish effects.

But other factors kept a relatively low ceiling on crude. Vienna's PVM Oil Associates noted that U.S. investor confidence "reportedly at its lowest level in a year (is) adding some bearish sentiment" to the market.

In the week covered by the last inventory report from the U.S. Energy Department's Energy Information Administration, crude oil stocks were more than 20 million barrels higher than the average for the same week in the previous five years.

Traders are now looking ahead to this week's inventory report due later Wednesday. Gasoline supplies are expected to have fallen 1.8 million barrels in the week ended Aug. 24, according to the average estimates of analysts surveyed by Dow Jones Newswires.

Crude oil inventories are expected to have fallen 800,000 barrels, and distillate stocks, which include diesel and heating oil, are forecast to have built 600,000 barrels. Refinery utilization rates are forecast to have remained unchanged at 91.6 percent.

In London, October Brent crude rose 5 cents to $70.58 a barrel on the ICE futures exchange.

Heating oil futures on Nymex were flat at $1.997 a gallon (3.8 liters). Natural gas prices rose more than 9 cents to $5.685 per 1,000 cubic feet.

AP business writer Thomas Hogue contributed to this report from Bangkok, Thailand