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Source: Associated Press
Date: 04/26/2006 00:00
VIENNA, Austria - Crude-oil prices inched upward as the market awaited the release of a weekly U.S. petroleum supply snapshot, and after the President Bush announced moves aimed at easing a fuel supply crunch.
The rise reflected expectations that the U.S. figures due for release later in the day would show another decline in gasoline stocks ahead of the high-demand summer driving season, as well as skepticism that Bush`s plan will do much to change fears primarily rooted in the West`s standoff with Iran over its nuclear program.
Light, sweet crude for June delivery gained 10 cents to $72.98 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Brent crude rose 21 cents, fetching $73.42 on London`s ICE Futures exchange.
Gasoline futures moved up half a cent to $2.1350 a gallon, while heating oil slipped nearly half a cent to $2.0540 a gallon. Natural gas gained 3.3 cents to $7.287 per 1,000 cubic feet.
On Tuesday, Bush gave the Environmental Protection Agency the authority to relax regional clean-fuel standards to attract more imports of gasoline to the United States and to make it easier for supplies to be moved from one state to another.
Bush also said he would defer shipments of crude oil into the U.S. Strategic Petroleum Reserve until the fall.
Questioning the effectiveness of that move, Vienna`s PVM Oil Associates noted that the 2.1 million barrels in question that had been earmarked for the Strategic Reserve "is a tiny volume, when compared to total U.S. demand of 21 million barrels a day."
Bush was reacting to retail regular gasoline prices moving near $2.92 a gallon, about 32 percent above year-ago levels, a month before the Memorial Day holiday, which traditionally kicks off the summer driving season, when demand peaks.
Concerns about gasoline supplies in the U.S. ahead of the summer have been one of the various factors keeping a high floor under crude oil prices, which are 33 percent higher than a year ago.
In government figures due out later Wednesday, U.S. gasoline stocks are expected to show another big decline — of 2.4 million barrels — for the eighth consecutive week, according to a Dow Jones Newswires survey of energy analysts.
Gasoline stocks tend to build at this time of year, but they have posted big declines in recent weeks because of relatively low refinery utilization and an ongoing effort by refiners to dump gasoline stocks blended with the additive MTBE.
In the seven weeks ended April 14, gasoline stocks declined by more than 23 million barrels, according to last week`s U.S. Energy Information Administration report. A projected draw of 2.4 million barrels would push stocks more than 6 million barrels below their five-year average for this time of year, according to EIA analyst Doug MacIntyre.
Distillate stocks, which include heating oil and diesel fuel, are expected to fall by 1.2 million barrels, while crude stocks were expected to show a draw of 137,500 barrels.
Besides the West`s nuclear standoff with Iran, oil traders are nervous about tensions in Nigeria and moves toward greater nationalization of natural resources in Venezuela.
In a further escalation of the war of words between Iran and the West, Iran threatened Tuesday to begin hiding its nuclear program if the West takes any "harsh measures" against it — Tehran`s sharpest rebuttal yet to a U.N. Security Council Friday deadline to suspend uranium enrichment or face possible sanctions.

