nymex oil ends up as gasoline rallies NYMEX oil ends up as...

nymex oil ends up as gasoline rallies NYMEX oil ends up as gasoline rallies on big draw
AAP News
7:35:020 30/03/2006
(Updates with settlement prices)
NEW YORK, March 29 (Reuters) - U.S. crude oil futures ended
higher on Wednesday as gasoline extended its rally on the wings
of the largest inventory drop since August 2003.
Heating oil futures also padded gains, helped by a
larger-than-expected supply drawdown.
Crude for May delivery settled 38 cents higher at
$66.45 a barrel on the New York Mercantile Exchange. It hit a
session high of $66.70, the highest since Feb. 2.
In London, May Brent crude settled at $65.55,
gaining 58 cents.
NYMEX April gasoline surged to an intraday high of
$1.96, gaining 7.55 cents, before settling at $1.9542, up 6.97
cents. The day's high was the highest level since Oct. 5.
NYMEX April heating oil finished at $1.852 a gallon,
up 2.43 cents, or 1.3 percent, just below its session high of
$1.856, the highest level since Feb. 1.
"The market is taking a cue from gasoline ... the draw
provided support for the rally," said a NYMEX floor trader.
Some analysts said the big draw should not have been a
surprise.
"The draw in gasoline is not surprising because we are
clearing stocks with MTBE and phasing in RBOB," said Tom Knight,
a trader at Truman Arnold in Texarkana, Texas.
"Also, there is a lot of cat-cracking capacity still down
because of refinery maintenance going on. I expect we will see
draws in the next two weeks or so," he said.
The U.S. Energy Information Administration, the statistical
arm of the Department of Energy, said domestic crude supply rose
2.1 million barrels to 340.7 million barrels for the week to
March 24, the highest since the week of April 16, 1999, and up
25.9 million barrels from a year ago.
Stocks rose as imports jumped 769,000 bpd to 10.1 million
bpd, while refinery runs were up just 0.3 percentage point at 87
percent of capacity.
Gasoline supplies fell 5.4 million barrels to 216.2 million
barrels, the largest decline since the week of Aug. 22, 2003.
Supplies have fallen in four consecutive weeks, but are still up
500,000 barrels from a year ago.
Gasoline production increased by 200,000 bpd to 8.3 million
bpd, while imports exceeded 1 million bpd for the eighth
consecutive week.
Gasoline demand was robust at 9.05 million bpd, near the
previous week's 9.1 million bpd level.
Distillate stocks dropped 2.5 million barrels to 124.2
million barrels. Heating oil accounted for the largest drop, by
2.1 million barrels, slashing supply to 46.1 million barrels.
Supply is 16.6 million barrels above the year-ago level.
Distillate production was down 200,000 bpd at 3.6 million
bpd while imports increased to 222,000 bpd.
Distillate demand held steady at 1.6 million bpd.
The Renewable Fuels Association said every major U.S. oil
refiner will likely stop using the water-polluting additive MTBE
and switch to ethanol when making motor fuel by May 5, when the
federal oxygenate requirement for reformulated gasoline is
repealed.
RFA President Bob Dinneen, in testimony before the U.S.
Senate Environment Committee, said there will be adequate
supplies of ethanol to meet the new demand.
EIA chief Guy Caruso, speaking at the same panel, said the
supply impact on the additive switch would be "a short-term
problem," with effects limited to the summer driving season.
The EIA has warned of local shortages in the East Coast and
some Texas cities.
Meanwhile, the five U.N. Security Council powers agreed on
Wednesday on a statement that would call on Iran to suspend
parts of its nuclear program that could be used to build
weapons, Britain announced.
The new text, which makes concessions to Russia and China,
is being referred to the full council for formal approval only
hours before foreign ministers of the five powers and Germany
meet in Berlin on Thursday to map out strategy on Iran.
The five powers are the United States, Russia, Britain,
France and China.
TECHNICALS
NYMEX crude resistance is at $67, support at $65.
Gasoline resistance was breached at $1.90 and the next peak
after the session high $1.96 is $2.07 hit on Oct. 5.
Heating oil surmounted resistance at $1.83 and the next
high after the day's peak of $1.856 sits at $1.89, set Feb. 1.
The gasoline crack spread ended at $13.66, after
rising as high as $14.09.
October crude settled at $68.81.




REUTERS
Reut 20:36 03-29-06