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Gas industry

Crude Contracts Rise on Nymex Amid Inventory Discrepancies and Speculative Buying

Strategic Insights

— 1 min read

Crude oil prices on the New York Mercantile Exchange (Nymex) surged on Wednesday as traders covered short positions and speculated on a potential shortage of gasoline. The April crude contract closed at $18.11/bbl, a 17-cent gain, as the Energy Information Administration (EIA) reported a smaller-than-expected increase in crude stocks. The rally was also driven by a discrepancy between the EIA and American Petroleum Institute (API) weekly inventory reports, with the EIA's report being less bearish. Meanwhile, speculative buying in gasoline and heating oil contracts strengthened prices, with the April gasoline contract settling at 54.04 cents/gallon and the April heating oil contract rising to 45.14 cents/gallon.

Key Takeaways:

  • The April crude contract on Nymex rose 17 cents to settle at $18.11/bbl, breaking through a key resistance level of $18.
  • Traders attributed the rally to covering short positions and disparity between EIA and API weekly inventory reports.
  • Renewed speculative buying strengthened April heating oil and gasoline contracts, with the April gasoline contract settling up 1.25 cents at 54.04 cents/gallon.
  • The EIA reported a 1.3 million bbl draw on gasoline stocks, and rumors of continued problems at Mobil Corp.'s refinery in Beaumont, Texas, contributed to the rally.
  • The April natural gas contract settled up 3.6 cents at $1.506/MMBtu on expectations of a larger decrease in gas stocks than reported the previous week.
  • Mobil Corp. stated that operations are normal at its 310,000 b/d refinery in Beaumont, Texas, despite a weekend fire.

Statistics:

  • April crude contract rose 17 cents to settle at $18.11/bbl, a 6.6% gain.
  • The April gasoline contract settled up 1.25 cents at 54.04 cents/gallon.
  • The April heating oil contract rose 0.8 cents at 45.14 cents/gallon.
  • The April natural gas contract settled up 3.6 cents at $1.506/MMBtu.

Sources:

  • "Nymex contract rises on crude, gasoline," Reuters, [no date mentioned]
  • Energy Information Administration (EIA)
  • American Petroleum Institute (API)
  • Report of the American Gas Association's storage survey (no date mentioned)

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