Crude prices advanced today after shaking off Tuesday’s inventories data from the American Petroleum Institute (API), which said that US oil stockpiles increased by a further 1.4 million barrels last week, while gasoline stockpiles and distillates, which include diesel and heating oil, added 1.6 million barrels and 1.7 million barrels respectively, signalling weaker demand.
A more closely watched inventories report from Energy Information Administration (EIA) is due out today.
Last week, EIA said that crude stockpiles rose by 2 million barrels in the previous week, while the API reported a 1.1 million barrel increase.
Commodities got support from a weaker US dollar, in declined ahead of a flurry of US data, which is due out later today and will include US business inventories, consumer price and retail sales updates as well as the Fed’s Beige Book survey of regional economic conditions.
A weaker US dollar makes dollar denominated commodities such as crude cheaper for holders of other currencies, boosting demand.
Crude was further bolstered by today’s gains in Asian and later European equity markets. The UK’s FTSE 100 stood 0.5% above the opening level in early afternoon, while the Dow Jones Industrial Average was projected to add 0.4% in early trade.
June Brent Crude improved to US$86/barrel, while US light, sweet crude for May delivery advanced to US$84.82/barrel.
Blue chip oil and gas producers were mixed today. BP (LSE: BP) added nearly 1%, while fellow supermajor Shell (LSE: RDSB) advanced 1.3%. BG Group (LSE: BG) was flat, while other FTSE 100 constituents Cairn Energy (LSE: CHE) and Tullow Oil (LSE: TLW) posted small losses.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) gained 1.3% and 1% respectively.
Midcaps also headed in different directions. Premier Oil (LSE: PMO), JKX Oil & Gas (LSE: JKX) and Melrose resources (LSE: MRS) did well, climbing 1.8%, 1.5% and 1.3% respectively. Dragon Oil (LSE: DGO) tacked on a little less than 1%.
Dana Petroleum (LSE: DNX), Heritage Oil (LSE: HOIL) and Salamander Energy (LSE: SMDR) shed less than 1%, while Soco International (LSE: SIA) was flat.
Wood Group (LSE: WG) posted a marginal gain, while another services company Wellstream Holdings (LSE: WSM) held steady.
Juniors companies didn’t show much movement today. EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) and Europe focused oil and gas developer Ascent Resources (AIM: AST) led the way with gains of 6% and 5% respectively.
US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) slipped 7.5%.