Crude oil inventories up despite lower imports

| November 8, 2006

Crude oil prices were higher on Wednesday when new inventory figures showed that distillates stockpiles fell much more than had been anticipated as well as on comments out of Saudi Arabia that the market is still oversupplied, which implies that OPEC is thinking of cutting production yet again.

Inventories of crude oil were up by 400,000 barrels in the week ending November 3, bringing the amount of oil in storage to 334.7 million barrels, much above average for the time of year. Imports of crude oil averaged 9.8 million barrels per day during the week, 306,000 barrels lower than the week before. In addition, even though gasoline stockpiles were down by 600,000 barrels they were still in the upper reaches of average storage for this time of year. Distillate inventories, which include heating oil and diesel fuel, were down by 2.7 million barrels.

Brent crude for December delivery was $1.01 higher to $59.49 in late afternoon trade in London, while December contracts for West Texas Intermediate crude added 96 cents by early afternoon on the New York Mercantile Exchange. December Nymex gasoline gained 4 cents to $1.5740 per gallon, while December Nymex heating oil was 3.7 cents higher to $1.7180 per gallon.

In the metals markets on Wednesday, gold dropped over $3 to $621.00/$621.55 early in the day in New York. Zinc prices were $80 lower to $4,420 per tonne even though they were as high as $4,535 per tonne during the day, a new record. The price decline came even though London Metal Exchange warehouse inventories dropped 1,825 tonnes to only 97,725 tonnes. Lead dropped $25 on the session to $1,715 per tonne despite a climb to $1,752 per tonne earlier. Copper prices were also lower, dropping $240 to $7,130 per tonne.


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