Crude rises on Q4 supply fears

Crude oil prices began the day trending downward on Wednesday, rose after the announcement that inventories of crude oil fell by 3 million barrels in the week ending June 3, but then fell again before the close. Stockpiles had been expected to rise by 200,000 barrels.

On the New York Mercantile Exchange, West Texas Intermediate for July was up 94 cents by mid-afternoon to $54.70 per barrel, but ultimately closed down $1.22 at $52.54 per barrel. December delivery was trading at just below $58 per barrel.

Meanwhile, in London, IPE Brent for July delivery was up 56 cents to $53.69 per barrel, then declined to close down $1.02 to $52.11 per barrel.

Analysts believe that inventory is not rising quickly enough to prevent a supply shortfall in the fourth quarter.

Gasoline and distillate inventories did rise, with gasoline stockpiles up 100,000 barrels, which was less of an increase than expected. Nymex July delivery gasoline rose 2.43 cents to $1.5390 per gallon. Distillate inventories were up by 1.3 million barrels, a bit more than expected, but fears that heating oil will be in short supply as winter approaches caused heating oil prices to go higher than gasoline prices, a rare occurrence at this time of year.

Nymex heating oil for July delivery rose 0.62 cents to $1.6070 per gallon.

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