Crude Turns Loss Into Gain After Fed

Source: http://feedproxy.google.com/~r/ContrarianProfits/~3/RknLQnVLre4/15123
Posted on Thursday, March 19th, 2009 | In Market Commentary

Contributed by: Doug Casey (http://www.contrarianprofits.com) -

In the energy market on Wednesday, the price of oil inched higher, with crude for April delivery closing at $49.64/barrel, up 46 cents. April reformulated gasoline dropped 5.81 cents, to $1.3657/gallon.

The Fed announcement turned the crude market around. Earlier in the day, oil had been dropping on an unexpectedly high stockpile report.

In its weekly inventory survey, the Energy Information Administration said that crude stocks rose by 1.94 million barrels, about one-third higher than expectations. Gasoline supplies rose 3.19 million barrels vs. projection of a 1.5 million barrel decline, and distillates added 112,000 barrels, well below the 1 million barrels expected. Refineries were operating at 82.1% of capacity, as opposed to 82.7% a week earlier.

“Prices are holding up pretty well given how bearish this report is,” said John Kilduff, of MF Global (NYSE:MF). “The gasoline inventory number was surprising, especially since refineries are operating at low rates. It short-circuits the argument that demand is recovering.”

Total daily fuel demand averaged over the past four weeks was 19.1 million barrels, down 3.2% from a year earlier, the EIA said.

Source: Crude Turns Loss Into Gain After Fed