Inventories down while OPEC raises production quotas

Crude oil inventories were down in the United States for the week ending June 10, and the news sent prices up on Wednesday after the new figures were released.

West Texas Intermediate for July rose $1.45 to $56.45 per barrel, while August contract Brent on the International Petroleum Exchange was up $1.09 to $55.93 per barrel.

Crude oil stockpiles in the US fell by 1.8 million barrels for the week, when a drop of only 400,000 barrels was expected. The decline in supplies was mostly due to higher production by refiners in order to meet demand. Gasoline inventories fell as well, by 900,000 barrels, when they had been predicted to increase.

As a result, Nymex July delivery gasoline was up 3 cents to $1.57 per gallon. Distillate inventories were up by 2.5 million barrels, but July delivery heating oil rose anyway, by 94 cents to $1.648 per gallon, again on fears of insufficient supplies.

These fears were not tempered by an expected move by OPEC ministers at their meeting in Vienna to raise production quotas by 500,000 barrels per day to 28 million barrels per day. The ministers also gave the OPEC president authorization to raise quotas again as early as next month by another 500,000 barrels per day if prices stay at current levels.