NEW YORK - Energy futures were mixed Wednesday after the U.S. government reported an unexpectedly large decline in crude supplies but surprising increases in heating oil and gasoline inventories. OPEC's announcement that it will keep production levels steady helped support prices.
Oil futures jumped briefly above $90 a barrel after OPEC's decision and again after the Energy Department's Energy Information Administration issued its weekly inventory report. While overall crude supplies plunged by 8 million barrels last week, much more than the expected 700,000 barrel decline, other aspects of the report were mixed.
Crude supplies grew at the closely-watching Nymex delivery terminal in Cushing, Okla. Inventories of heating oil rose when analysts had expected a decline, and gasoline supplies rose more than expected.
"Overall, this is a mixed report," said Tim Evans, an analyst at Citigroup Inc., in a research note.
Earlier Wednesday, Organization of Petroleum Exporting Countries ministers meeting in Abu Dhabi, United Arab Emirates, said the cartel would leave output unchanged "for the time being," because the world was "well supplied" and crude reserves are at comfortable levels.
Light, sweet crude for January delivery rose 68 cents to $89 a barrel on the New York Mercantile Exchange, but trading was volatile as traders digested the EIA report.
Other energy futures were mixed. January gasoline fell 0.3 cent to $2.2487 a gallon on the Nymex, and January heating oil rose 1.15 cent to $2.5233 a gallon.
December natural gas rose 3.7 cents to $7.192 per 1,000 cubic feet on the Nymex.
In London, December Brent crude rose 78 cents to $90.31 a barrel on the ICE Futures exchange.
At the pump, meanwhile, gas prices fell 0.8 cent overnight to a national average of $3.044 a gallon, according to AAA and the Oil Price Information Service. Gas prices have fallen 6.8 cents since mid-November, when they spiked higher as oil approached $100 a barrel.
In its report, the EIA said inventories in Cushing, Okla., rose by 700,000 barrels during the week ended Nov. 30, the third week in a row supplies there have grown. Activity at the Cushing terminal is studied closely by oil traders because it is the physical delivery point for Nymex crude. Falling supplies there are seen as a symptom of a tight market, and those concerns ease when Cushing inventories rise.
Refinery activity was unchanged last week at 89.4 percent of capacity. Analysts surveyed by Dow Jones Newswires, on average, had expected refinery utilization to rise by 0.1 percentage point to 89.5 percent of capacity.
Supplies of gasoline rose by 4 million barrels, much more than the 700,000-barrel increase analysts had expected. And inventories of distillates, which include heating oil and diesel fuel, rose by 1.4 million barrels, countering analyst expectations for a 400,000-barrel decline.
Some of the decline in crude supplies can be explained by oil imports, which fell last week by an average of 980,000 barrels a day to 9.4 million barrels a day. Gasoline imports rose last week by 334,000 barrels a day to an average of 1.2 million barrels a day.
Gasoline demand slid last week by about 90,000 barrels, and is up by 0.2 percent over the last four weeks compared to the same period last year, the EIA said.
Oil prices have dropped about $10 from all time-highs near $100 in a little over a week on evidence of rising inventories at Cushing, on speculation that OPEC would boost supplies and on evidence that some OPEC countries are already producing more oil than their quotas call for.
Indeed, OPEC output could jump by another 300,000 to 400,000 barrels a day once oil fields in the United Arab Emirates return to service from seasonal maintenance, wrote Costanza Jacazio, an analyst with Barclay's Capital, in a research note.
Despite holding output steady, OPEC ministers said the cartel is ready to step in if needed. The 13-nation group plans to meet again Feb. 1 to review its decision.
