Crude futures were slightly higher today after extending losses on Wednesday despite an unexpected drop in crude inventories, which was revealed by the US Department of Energy (DoE) in its weekly update. Oil stockpiles fell 3.9 million barrels last week, an even larger decrease than the 2.2 million barrel draw reported by the American Petroleum Institute (NYSEMKT:API) on Tuesday, while analysts were expecting an increase of less than 1 million barrels.
Meanwhile, the Energy Information Administration said that gasoline stockpiles were up 2 million barrels, which was a greater than expected increase, while distillate stocks rose by 0.4 million barrels instead of the decline of 1.8 million barrels projected by Platts. The decline in distillate stocks reflects a weaker demand for heating oil, which was the main driver behind crude's recent surge, which saw prices reach nearly $84/barrel.
The oil prices were supported by today’s positive movements in global stock markets after yesterday’s late rally on Wall Street after the Federal Reserve almost unanimously decided against raising the currently ultra low levels boosted Asian and European stocks.
March Brent Crude rose to US$72.82/barrel, while US light, sweet crude returned above US$74 and stood at US$74.30/barrel in mid afternoon.
Blue chip energy stocks were mixed today. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) posted insignificant losses, while BG Group (LSE: BG) and Cairn Energy (LSE: CNE) rose marginally and Tullow Oil (LSE: TLW) took the lead with a 2% climb.
Oil and gas service companies Amec (LSE: AMEC) and Petrofac (LSE: PFC) did better, climbing 1% and 1.5% respectively.
All midcap oil and gas producers were higher today with the sole exception of Salamander Energy (LSE: SMDR), which made little headway.
Melrose Resources (LSE: MRS) led the pack, advancing 5.2%, Dragon Oil (LSE: DGO) followed with a 3% gain, JKX Oil and Gas (LSE: JKX) and Premier Oil (LSE: PMO) were up 2%, Heritage Oil (LSE: HOIL) added 1.5% and Dana Petroleum (LSE: DNX) tacked on 1%, as did Soco International (LSE: SIA).
North Sea explorers Xcite Energy (AIM: XEL) was one of the top performers in the sector, advancing 13%. Europe focused oil and gas developer Ascent Resources (AIM: AST) followed with a 7% gain and Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) added 3.5%.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO), North America focused oil & gas junior Pantheon Resources (AIM: PANR) and Gulfsands Petroleum (AIM: GPX) headed in the opposite direction, shedding 8%, 5% and 3.5% respectively. www.proactiveinvestors.co.uk/companies/news/12723/crude-futures-inch-higher-after-falling-on-distillate-inventories-update-energy-stocks-rise-12723.html
Disclosure: The author holds no positions in the company