Oil steady at mid-USD 73 a barrel after rise overnight

Oil prices were steady Thursday after jumping in the previous session on unexpected declines in U.S. refinery utilization rates and crude and gasoline inventories.

Photo: Oil steady at mid-USD 73 a barrel after rise overnight

Light, sweet crude for October delivery fell 1 cent to US$73.50 a barrel in Asian electronic trading on the New York Mercantile Exchange, mid-afternoon in Singapore. The contract rose US$1.78 to settle at US$73.51 a barrel Wednesday.

The crude and gasoline inventory declines in the U.S. suggest the refining industry is easing back from what had been a scramble to produce more gasoline to supply the peak summer driving season, which ends this weekend.

The U.S. Energy Department's Energy Information Administration reported that refinery utilization rates fell 1.3 percentage points to 90.3 percent of capacity in the week ended Aug. 24. Analysts surveyed by Dow Jones Newswires, on average, had expected no change.

The decline in activity helped cut gasoline inventories by 3.6 million barrels. Analysts had expected a 1.8 million barrel decline.

The EIA also reported that crude oil inventories fell 3.5 million barrels, much more than the 800,000 barrel decrease analysts expected. Distillate stocks, which include diesel and heating oil, increased 900,000 barrels, more than the 600,000 barrel increase analysts forecast.

In London, October Brent crude advanced 9 cents to US$72.22 a barrel on the ICE futures exchange.

Nymex heating oil futures added 0.16 cent to US$2.0435 a gallon (3.8 liters). Gasoline prices rose 1.42 cents to US$2.115 a gallon.

Natural gas futures rose 1.9 cents to US$5.60 per 1,000 cubic feet. Natural gas inventories are already at record levels, and prices are lower than they were a year ago, which could be good news this winter for people who rely on natural gas for heating.