Oil Waffles on Supply Outlook, Chavez
After rising $6.45 a barrel since Wednesday, some investors moved to lock in profits in case the Energy Department on Wednesday reports a much bigger-than-expected jump in supplies. In its weekly inventory report, the department's Energy Information Administration is expected to report that crude inventories grew 2.5 million barrels last week, according to the average estimate of analysts surveyed by Dow Jones Newswires. Gasoline supplies likely also rose, while supplies of distillates, which include heating oil and diesel fuel, likely fell. But prices were supported by new tough talk from Venezuela's oil minister, who told a Venezuelan newspaper that "we're ready" to cut off oil shipments to the United States. Exxon Mobil Corp. won court orders last week freezing as much as $12 billion of the assets of state-owned oil company Petroleos de Venezuela SA. Exxon Mobil is fighting Venezuela's nationalization of a multibillion dollar oil project. Light, sweet crude for March delivery fell 3 cents to $93.56 a barrel on the New York Mercantile Exchange but alternated between gains and losses. Not all the talk out of Venezuela Tuesday was confrontational. Bernard Mommer, a Petroleos de Venezuela board member, told state television that Venezuela would like to avoid cutting off U.S. oil exports, Dow Jones Newswires reported. While cutting off oil shipments is feasible, it "would cost (Venezuela) money and would cost the other side money too," Mommer said. Analysts doubt Chavez would follow through on the threat, noting that U.S. refineries are uniquely designed to process the heavy, sour crude Venezeula produces. "He's never going to cease oil exports to the U.S., it would be disastrous for their economy," said Jim Ritterbusch, president of Ritterbusch and Associates, in Galena, Ill. At the pump, meanwhile, gas prices rose 0.8 cent overnight to a national average of $2.961 a gallon. Gas prices, which typically lag the futures market, have mostly fallen in recent weeks as oil retreated from last month's record above $100 a barrel. Other energy futures were mixed Tuesday. March heating oil futures rose 0.43 cents to $2.6087 a gallon on the Nymex while March gasoline futures slipped 0.87 cent to $2.3875 a gallon. March natural gas futures rose 1.2 cents to $8.543 per 1,000 cubic feet. Heating oil and natural gas futures were supported by new forecasts calling for colder than normal temperatures in the Northeast and Midwest next week. In London, Brent crude rose 1 cent to $93.54 a barrel on the ICE Futures exchange. Associated Press Writers George Jahn in Vienna and Gillian Wong in Singapore contributed to this report. |
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NEW YORK (AP) - Oil futures fluctuated Tuesday after a 3 day, 7.4 percent rally as traders weighed expectations that oil supplies rose last week against concerns that Venezuelan president Hugo Chavez may follow through on his threat to cut oil sales to the U.S.