Crude oil futures, spot prices drop

Journal Record, The (Oklahoma City), Mar 24, 1997 by From Staff, Wire Services

Crude oil fell as traders considered higher imports against a backdrop of steadily rising U.S. demand for crude, now that more refineries are emerging from seasonal maintenance.

Imports of crude into the U.S. rose to 7.849 million barrels a day last week, 339,000 barrels a day more than a week earlier, the American Petroleum Institute said Tuesday. Traders said imports were bolstered by additional cargoes from West Africa and by cheaper North Sea crude oils such as Brent Blend.

Still, overall U.S. crude oil inventories rose just 76,000 barrels last week to 304.70 million barrels, a smaller-than-expected gain, and refinery demand rose 1 percent to 13.71 million barrels a day, the highest level in nine weeks. "I don't think imports are fully factored in the market yet," said Rich Redash, an energy analyst at Prudential Securities in New York. May crude fell 34 cents to settle at $21.51 a barrel on the New York Mercantile Exchange. April crude expired at $22.32 a barrel yesterday. Spot prices were lowered $1 per barrel Friday by Koch Oil Co. and Total Petroleum Inc. decreasing Oklahoma Sweet and West Texas Intermediate to $19.50 a barrel. Koch and Total priced Oklahoma Sour at $16.90 a barrel. Gasoline futures rose though they didn't surpass Wednesday's six- week high of 67.96 cents a gallon. April gasoline rose 0.06 cent to 67.64 cents a gallon while the more active May contract fell 0.15 cent to 67.19 cents a gallon. Gasoline inventories have dropped for four out of the past five weeks, surprising analysts because the declines come at a time when refiners need to start building stockpiles for peak summer demand. Last week, inventories fell 4.32 million barrels to 198.17 million barrels, and are now 4.6 percent lower than a year ago, according to the API. April heating oil rose 0.04 cent to settle at 55.98 cents a gallon. Elsewhere, the Environmental Protection Agency said it would announce changes to the rules of its reformulated gasoline program possibly as soon as next week. "There are some minor modifications to the rules which we expect to announce soon," said Martha Casey, a spokeswoman for the EPA in Washington. States that have joined the EPA program to help reduce pollution are obliged to sell cleaner-burning reformulated gasoline, or "RFG," the grade traded on the Nymex. Energy analysts said the rules could detail how states already included in the program could opt out, though the EPA declined to elaborate on the changes. RFG accounted for 30 percent of total U.S. gasoline demand during the past 12 months, according to the API. Any change in the number of states participating in the program will affect demand for RFG, and could ultimately affect the price of Nymex unleaded gasoline futures, analysts said. NYT-03-21-97 1758EST