Oil prices inched down from a five-week high on Thursday after surging 5 percent on growing worries that US refiners' focus on meeting summer gasoline demand could worsen a winter supply crunch. Dealers have shrugged off the US dollar's meteoric rise versus the euro this week and signs that Opec would keep its taps wide open, pushing oil prices to their highest since late April and putting them only $4 below the April 4 record peak.
US crude oil futures shed 18 cents to $54.42 barrels in Asian trading, barely making a dent on Wednesday's $2.63 gain, the biggest one-day rise since February 22.
Prices are up 16 percent over the past two weeks. Heating oil led the market on Wednesday, gaining 6 percent to $1.54 a gallon, more than 50 percent higher than this time last year.
Prices were down 5 points at $1.5395 on Thursday. With healthy gasoline inventories looking likely to last the summer driving season, which began at the weekend, dealers have shifted their attention unusually to winter fuel supplies.
"Obviously there's concern that there might not be enough diesel," said Colin Tang, an oil trader at investment bank Clayton in Singapore. As refineries typically produce more gasoline and less of other fuels in the spring, some worry that the industry may be ill prepared to meet peak heating demand this winter.
US commercial stockpiles of distillates, which include heating oil and diesel, are just 1 percent higher than a year ago, while demand is expanding at 3 percent over last year, government data showed last week.
This is a thin supply buffer compared to crude stockpiles that are more than 10 percent above year-ago levels and gasoline supplies that are up nearly 6 percent.
But Tang noted that refiners still had time to top up their distillate tanks, which typically begin rising in May. "It looks tight now, but when refiners come back from maintenance they'll be trying to make more diesel," he said.
US inventory data due later on Thursday is expected to show no change in crude stocks but a gain of 300,000 barrels in gasoline supplies and a 1.1 million-barrel rise in distillates, a Reuters survey of analysts found.
The Organisation of the Petroleum Exporting Countries (Opec) pumped more than 30 million barrels per day (bpd) of crude last month, its highest level in 25 years, in an effort to beef up stocks.
Oil traders were also put on alert by a forecast that this year's Atlantic-Caribbean hurricane season, which runs June through December, could be more severe than usual, potentially disrupting Gulf of Mexico output just when markets need it most.
Comments
Comments are closed.