US oil supplies rise, but price moves sideways

The price of oil has held fairly steady today, despite indications that the cold weather in the US is helping to eat up supplies of distillate fuel.

Data released by the Energy Information Administration, the statistical division of the US Energy Department, showed a small increase in US domestic stockpiles of crude oil, alongside a similar rise in motor gasoline and a sizeable drop in distillate fuels.

Distillate fuel is produced from crude oil in conventional distillation operations and includes diesel fuels and fuel oils used for heating. The unseasonably cold weather that much of the US Midwest and East Coast has been experiencing is naturally leading to greater demand for heating fuels. This, along with a lower production of distillate fuel last week, has led to the big decline in supplies.

US commercial crude oil inventories rose by 0.4 million barrels last week, while total gasoline supplies increased by 0.5 million barrels.  Distillate fuel inventories drew down by 2.4 million barrels, taking the total below the lower limit of the average range for this time of the year. Refineries operated at 86.1% of capacity last week, down from the week before.

The market’s reaction to the data was fairly low key, despite the larger-than-expected draw in distillates and the smaller-than-expected build in crude.

By mid-afternoon in New York, crude oil futures for March were up just 0.15% at $97.30 a barrel.

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