Oil tops $68 on gasoline supply concerns

July 3, 2007 - 0:0

NEW YORK (AP) -- Crude oil and gasoline prices rose Wednesday after a government report showed gasoline inventories unexpectedly shrinking last week.

Heating oil prices also increased after a surprising decline in distillate stocks. Light, sweet crude for August delivery on the New York Mercantile Exchange (Nymex) gained 31 cents to $68.08 a barrel in morning trading. The contract had fallen $1.41 on Tuesday. Brent crude futures edged up a penny to $70.18 on London's ICE Futures exchange. Gasoline futures rose less than a half-cent to $2.2515 a barrel. The Energy Department reported Wednesday that gasoline inventories dropped 700,000 barrels in the week ended June 22, contrary to the 1.1 million gain that had been expected by analysts polled by Dow Jones Newswires. Total gasoline stocks are well below the lower end of average for this time of year. Crude oil supplies rose by 1.6 million barrels to 350.9 million barrels last week, above the average estimate of a 1 million barrel increase. Inventories are well above the upper end of average. Distillate stocks which include heating oil and diesel fuel, decreased by 2.3 million barrels and remain in the middle of average for this time of year. Analysts expected an increase of 200,000 barrels. Refinery utilization rebounded 1.8 percentage points to 89.4 percent following a decline of 1.6 percent in the previous week. Analysts had expected a smaller gain of 0.8 percentage points to 88.4 percent. However, the report noted that gasoline production remained nearly flat compared to the previous week. The weekly petroleum supply snapshot has been watched closely during a spring and early summer in which an unusually high number of refinery outages have led to high oil and gasoline futures prices and record U.S. gasoline prices at the pump. July heating oil futures on Nymex increased 1.55 cent to $2.0088 a gallon, while natural gas for July delivery inched up 0.8 cent to $6.885 per 1,000 cubic feet