NEW YORK: Oil prices were stable Wednesday after official data showed crude stockpiles fell in the United States, the world's biggest consumer of crude. New York's main contract, light sweet crude for October delivery, ended at 68.05 dollars a barrel, unchanged from Tuesday's closing price.
London's Brent North Sea crude for October fell six cents to 67.66 dollars a barrel. The US Department of Energy on Wednesday said the country's crude stockpiles fell by 400,000 barrels in the week to August 28, matching analysts' consensus forecast.
Gasoline stockpiles fell by three million barrels, far steeper than expected. But the markets were hardly impressed with the drop in reserves.
"On the surface, US oil data for the last week of August are among the most bullish in quite a while, but they come with hidden pitfalls," said Antoine Halff of Newedge USA.
Citing gasoline, which accounted almost single-handedly for the bulk of the demand spike, he said, "Whether that bounce from an extremely low base can be sustained, as opposed to it being just a one-off correction, is doubtful."
Jason Schenker of Prestige Economics said supply and demand dynamics were "slightly more bearish right now" with the end of the summer driving season.
"The gasoline numbers were very strong, but that was last month," he said. "But now the summer driving season is over."
Oil was bearish this week on investor concerns over the pace of economic recovery in the United States and China, the world's leading energy users.
Crude prices briefly hit 75 dollars last week, the highest level in 10 months, but soon fell back as analysts questioned the strength of underlying demand.
"Oil simply would not hold above 75 dollars because investors started to focus a lot more on the fundamentals," said Purvin & Gertz analyst Victor Shum.
Oil market traders have looked to China to support an expected rebound in global oil demand in 2010, after two years of contraction. Link...
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