Oil prices end higher

Oil prices end higher

	Published : Wed, 18 Apr 2007 22:10 By : Agencies Print this Story

NEW YORK (AP) - Oil prices ended the day higher after the government reported falling inventories of oil and gasoline, and the Energy Department said it wants to buy 4 million barrels of crude.

The Energy Information Administration reported U.S. crude oil stockpiles fell by a million barrels to 332.4 million barrels -- countering analysts' average forecast for an increase of 500,000 barrels, according to a survey by Dow Jones Newswires. Gasoline inventories fell by 2.7 million barrels, more than the expected 1.5 million barrel decline.

Separately, The Energy Department solicited offers for up to 4 million barrels of oil for the nation's Strategic Petroleum Reserve, which is intended as a backup oil supply in the event of a severe, unexpected disruption.

Oil and gasoline futures had spent much of the day in negative territory. Industry observers earlier said traders were looking past the government inventories report to signs that gasoline production is on the rise.

For instance, refinery utilization rates were up 2 percent in the EIA report, well above expectations of a 0.4 percent rise. Tim Evans, energy analyst at Citigroup Global Markets, said those utilization rates and data indicating increases in production and imports suggest gasoline supplies will increase later in the spring.

'The market was already anticipating a decline in product inventories,' Evans said.

But at the end of the day, said Edward Meir, an analyst at Man Financial Energy Group, 'The numbers were friendly and I think people realized that at the close.'

Light, sweet crude for May delivery rose 3 cents to settle at $63.13 a barrel on the New York Mercantile Exchange. The May contract expires on Friday. Brent crude for June delivery rose 11 cents to close at $66.04 on London's ICE Futures Exchange.

Gasoline futures rose 2.75 cents to $2.0833 a gallon. The average retail price of a gallon of gas was unchanged Wednesday at $2.87, according to AAA.

Meir didn't think the Energy Department's move to boost the Strategic Petroleum Reserve had much to do with the late price swings.

'It's a drop in the bucket, what they are buying,' Meir said.

The market was also watching mixed signals from Nigeria. Civil strife continued throughout the country ahead of this weekend's presidential elections. But the country's oil minister announced a major oil field could come back online by the end of May.

'We are getting some real mixed signals out of Nigeria,' Evans said.

Nigeria is the world's eighth-largest exporter and a main supplier to the United States. Nigerians vote Saturday in presidential elections, a week after at least 21 were killed in violence surrounding state elections.

In other Nymex trading, heating oil futures rose less than a penny to settle at $1.8066 a gallon, while natural gas prices were up 7.9 cents to settle at $7.497 per 1,000 cubic feet.

Associated Press Writers George Jahn, in Vienna, Austria, and Derrick Ho, in Singapore, contributed to this report.