Crude Futures Fall With Inventory Data

www.kansas.com Posted on Thu, Jan. 23, 2003 Associated Press

NEW YORK - Crude oil futures fell Thursday, as bearish weekly inventory data and hopes for a full resumption of Venezuelan oil output reassured jittery traders.

On the New York Mercantile Exchange, front-month March crude ended down 60 cents at $32.25 a barrel.

"It was a combination of two things," said Phil Flynn, an analyst at Alaron Trading Corp., referring to Thursday's decline in prices. "No. 1, we didn't set a new all-time low in crude inventories. No. 2, 75 percent to 80 percent of Venezuelan oil workers are back at their jobs."

February heating oil rose 0.34 cent to close at 91.53 cents a gallon, while February gasoline slipped 0.12 cent to settle at 89.81 cents a gallon.

On London's International Petroleum Exchange, March Brent settled with a loss of 62 cents at $29.72 a barrel.

Natural gas for February fell 21.5 cents to settle at $5.458 per 1,000 cubic feet.

Crude futures dipped early in the session after data from the Department of Energy and the American Petroleum Institute showed a surprise build in U.S. crude oil inventories.

In the week ended Jan. 17, crude stocks rose by 1.5 million barrels to 273.8 million barrels last week as refinery utilization declined and imports rose by 256,000 barrels a day to 8.745 million daily barrels, the EIA reported.

The API report largely confirmed those figures, showing a build of 181,000 barrels in crude stocks and a surge of 548,000 barrels a day in imports.

"The key to this whole thing is run cuts," said Bill O'Grady, an analyst at A.G. Edwards in St. Louis. "You've got refinery maintenance clearly under way. That reduces demand for crude oil."

Refiners have also been cutting back on operations in response to a shortage of Venezuelan crude oil, a concern that has helped send crude futures soaring.

While there were no signs that the strike in Venezuela, now in its eighth week, is about to end, news reports suggested that the government of President Hugo Chavez is making modest progress in restoring oil operations.

Petroleos de Venezuela SA, or PdVSA, the state oil monopoly, said Thursday that about 80 percent of its hourly workers and half its administrative staff have returned to work.

The news helped send crude prices sharply lower.

Striking oil workers disputed the claim.

PdVSA's comments come after a first crack appeared in the strike after tanker pilots earlier this week ended their strike at Lake Maracaibo, paving the way for an increase in imports.

Meanwhile, Abdullah bin Hamad al-Attiyah, president of the Organization of Petroleum Exporting Countries, said the group is trying to "stabilize" the oil market.

"We don't want to see the world with a shortage of oil," al-Attiyah said in Davos, Switzerland.