Oil Extends Gains After Inventory Drop

Benchmark New York oil futures nosed higher in electronic trade Wednesday after data showed a larger-than-expected drop in U.S. crude supplies.

The October contract CLV2 — which became the new front-month contract Wednesday — added 10 cents, or 0.1%, to $96.93 a barrel during Asia trading hours, after ending regular New York Mercantile Exchange trade at $96.84 Tuesday

The advance followed the American Petroleum Institute’s weekly inventory report, which showed a six-million-barrel drop in crude supplies last week. Read more on API crude stocks report.

The more closely watched Energy Information Administration supply data were due out later in the day, with analysts polled by Platts ahead of the API report predicting a two-million-barrel decline.

Wednesday’s early gains for oil followed a fresh three-month high for the front-month contract Tuesday in New York, hit ahead of the API report, as investors hoped for European Central Bank action to help support euro-zone sovereign bonds. Read more on Tuesday’s oil trade.

September heating oil HOU2 rose a cent to $3.13 a gallon, while September gasoline RBU2 slipped a cent to $3.06 a gallon.

The API report said U.S. distillates inventories fell one million barrels, while those for gasoline rose 869,000 barrels.

Natural gas for September delivery NGU2 enjoyed a more significant 1.1% gain, to $2.81, after settling at $2.78 in New York on Tuesday.

Marketwatch