Commodities Thursday, July 10, 1986 : Oil Futures Prices Advance

Oil futures prices advanced Thursday, but there was no masking that the industry is still in deep trouble, analysts said.

Industry data released Wednesday indicates American refineries reversed the pattern of recent weeks and geared down their operations during the week ended July 4.

The American Petroleum Institute said the refineries were operating at 83% of capacity, down from 87.6% the previous week.

Stocks of gasoline and crude oil also declined, but this was regarded as essentially neutral in trading at the New York Mercantile Exchange, analysts said.

Despite the advance in futures prices, with the nearby oil contract up 48 cents a barrel, “the market is still fairly negative,” said Richard Marose, an analyst in Chicago with Geldermann Inc.

“At the core of the world oil situation,” Marose added, “is OPEC wanting to achieve higher prices but producing more and more oil.” Early in the trading day, he said, there was a rumor, later discounted, that Saudi Arabia and Kuwait were pulling out of the Organization of Petroleum Exporting Countries.

“While this was untrue, the rumor showed that world oil is losing faith in OPEC,” Marose said.