Oil prices little changed below USD 77 after moderate rise overnight

Oil prices were flat Friday after a moderate rise in the previous session on mixed interpretations of U.S. fuel stocks data.

Photo: Oil prices little changed below USD 77 after moderate rise overnight

Light, sweet crude for September delivery rose 2 cents to US$76.88 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract added 33 cents to settle at US$76.86 a barrel Thursday.

Analysts say energy investors are engaged in a tug of war 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, on average.

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, analysts said.

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 US$78.77. Meanwhile, gasoline futures fell on the refinery and gasoline inventory news.

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

September Brent crude dropped 8 cents to US$75.68 a barrel on the ICE futures exchange in London.

Nymex gasoline futures added 0.1 cent to US$2.0372 a gallon (3.8 liters), while heating oil prices advanced a tad to US$2.075 a gallon. Natural gas prices gained 3.4 cents to US$6.14 per 1,000 cubic feet.