Oil Prices Dip in After-Hours Trading Amid Growing Supply
U.S. oil prices softened late Tuesday as a new report showing a hefty supply buffer of domestic gasoline and heating oil eased market worries over a terror threat against oil tankers in the Mideast.
U.S. heating oil supplies, which are becoming a market focus ahead of the winter heating season, rose 2.7 million barrels in the week ended Friday, while gasoline inventories rose 66,000 barrels, according to the weekly American Petroleum Institute report.
Crude oil inventories were lower, but by a moderate 470,000 barrels.
U.S. and European oil prices had surged earlier in the day to near 19-month highs amid a warning from the U.S. Navy of potential Al Qaeda terrorist attacks on ships in the Gulf in the Middle East, as well as amid heightened concern that looming U.S. military action against Iraq could disrupt oil supplies from the region.
But near-term crude oil futures closed unchanged in New York at $29.73 a barrel after rising as high as $30.20.
And after regular trading ended, crude prices dipped slightly in after-hours activity, to $29.65, following the API inventory data.
Both gasoline and heating-oil inventories have climbed to more than 11 million barrels above their levels of a year ago.
U.S. inventories of gasoline stand at 206.5 million barrels, up from 194.6 million a year ago; heating oil inventories are at 134 million barrels, up from 121 million.
Crude oil inventories, however, at 298.4 million barrels last week, are down from 304.9 million barrels a year ago.
The International Energy Agency, which defends energy security for the industrialized world, has said it expects the Organization of the Petroleum Exporting Countries to act on output after the recent surge in crude prices from $26.50 a barrel in late July.
Some analysts believe that major producer Saudi Arabia wants to increase production to prevent a possible supply crunch this winter.
But Kuwait said Monday that it would not support an output increase unless prices have a sustained run above the $28-a-barrel top end of OPEC’s targeted price range for a basket of cartel crudes. The basket was at $27.59 a barrel Monday.
