The Energy Information Agency is reporting that oil prices spiked after a dip in gasoline inventories and a smaller than expected increase in the supplies of oil:
NEW YORK (CNNMoney.com) — Oil prices jumped Wednesday, after a closely-watched report showed a smaller than expected increase in oil supplies and a dip in gasoline inventory.
What prices are doing: Light, sweet crude for April delivery jumped $1.46 cents to $82.95 after the Energy Information Administration’s report was released Wednesday.
What’s moving the market: The EIA report showed that U.S. commercial crude oil inventories increased by 1.4 million barrels, below analyst estimates of 2.1 million barrels, according to a survey from research firm Platts.
Gasoline and distillate inventories fell by 2.9 million and 2.2 million barrels, respectively. Those inventories fell more sharply than analysts expected, indicating more demand.
According to Platts, analysts expected gas inventories to drop 338,000 barrels and distillates to fall 950,000.
The EIA’s actual report won’t be available online until after 1:00pm.
This is another “good news/bad news” sort of report. An increase in supply would seem to suggest at least the possibility of an increase in economic activity. However, the relative significance of reductions in supplies and increases in demand are important. If suppliers aren’t particularly eager to restock, it might mean that they expect a prolonged period of doldrums.
The increase in demand is still far below historic levels so don’t break out the champagne just yet.
Am I being overly cynical or do some of these reports sound like grasping at straws to you?
“Light, sweet, crude” is what I always looked for in a woman.