Crude prices gain after early declines

Crude oil prices were lower early in the session on Wednesday, but turned higher after the US Energy Information Administration issued its weekly inventories report, which showed that crude oil stockpiles dropped last week.

The EIA said that crude oil inventories were down 4.16 million barrels in the week ended 31 December, more than expected by some analysts but less than the report Tuesday afternoon from an industry group, the American Petroleum Institute, which said that crude oil in storage dropped 7.5 million barrels last week.

On the other hand, the EIA report showed that gasoline stockpiles were up by 3.3 million barrels last week, against an expected gain of just 600,000 barrels, while distillates in storage were 1.1 million barrels higher, more than twice the expected gain.

In late morning trade, prices for February contracts of West Texas Intermediate crude were up 49 cents to $89.87 per barrel on the New York Mercantile Exchange, while Brent crude had added $1.69 to $95.22 per barrel on the ICE Futures Europe exchange in London.

Prices were helped higher by a private report showing that the US private sector added 297,000 new jobs in December.

Nymex February gasoline futures were also higher, adding 2 cents to $2.44 per gallon, while heating oil futures were up 3 cents to $2.54 per gallon but natural gas futures were down 19 cents to $4.48 per million British thermal units.

The retail price of regular unleaded gasoline was up overnight to $3.077 per gallon on average.