Oil prices climb as crude supplies shrink; gasoline pump prices unchanged

Oil prices rise after crude stockpiles fall

Oil prices edged up Wednesday after the government said crude inventories fell and refineries boosted production.

Gas pump prices halted a post-July 4th slide and remained unchanged, according to AAA, Wright Express and Oil Price Information Service. The national average for a gallon of unleaded regular is $2.713, down 0.8 cent from a week ago and almost 20 cents higher than a year ago.

The Commerce Department said shoppers cut back on spending for the second straight month, raising concerns about the pace of the economic recovery and the potential for stronger oil and gas demand.

“Inventories are rebuilt to a large extent. The stimulus is winding down and we’re back to relying on the consumer to push things along. He can’t spend because he can’t borrow any money to do it,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.

Benchmark oil for August delivery rose 68 cents to $77.83 in midday trading on the New York Mercantile Exchange.

The Energy Department’s Energy Information Administration said in its weekly report that commercial crude inventories shrank by 5.1 million barrels to 353.1 million barrels. The total was 2.5 percent higher than year-ago levels and above the upper limit of the average range for this time of year.

Analysts expected a drop of only 2.6 million barrels for the week ended July 9, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline inventories gained 1.6 million barrels at 221 million barrels, which is 3 percent more than a year ago. Analysts expected an increase of 950,000 barrels.

Demand for gasoline over the four weeks ended July 9 averaged 9.3 million barrels a day, about 1.8 percent more than year-ago levels.

Inventories of distillate fuel, which include diesel and heating oil, rose by 2.9 million barrels to 162.6 million barrels. Analysts expected distillate stocks to rise by 800,000 barrels.

Meanwhile, U.S. refineries ran at 90.5 percent of total capacity on average.

“At the end of the day, one thing that we’re seeing is a little larger than normal crude draw, but they’re simply turning it into products faster,” Ritterbusch said.

In other Nymex trading, heating oil rose 0.91 cent at $2.0565 a gallon, gasoline added 0.35 cent at $2.0856 a gallon and natural gas rose 1.1 cents to $4.343 per 1,000 cubic feet.

Brent crude rose 66 cents to $77.31 a barrel on the ICE futures exchange.