NEW YORK, 11 November 2004 — Oil prices rebounded from seven-week lows yesterday, jumping $1 as a drawdown in US heating fuel stocks rekindled worries about thin supply levels ahead of the northern winter.
US light crude was up $1.00 at $48.37 a barrel by 1855 GMT, after hitting a low of $46.96, 15 percent below its all-time high reached in late October. London Brent was up 84 cents at $44.55.
Prices jumped after the Energy Information Administration (EIA) said distillate stocks, which include heating oil, fell by 100,000 barrels to 115.6 million last week, an eighth straight weekly drop. Inventories are 13 percent below last year. Adding to demand worries, temperatures in the big US Northeast heating oil market are expected to remain chilly for the next 10 days, kicking off a colder than normal winter, forecasters said on Wednesday.
The EIA also reported a 3.2 percent rise in refinery runs to 92.6 percent as plants emerged from seasonal maintenance. Higher refinery runs will increase demand for crude oil as plants look to maximize heating oil supplies for winter.
Crude stocks rose by 1.8 million barrels last week to 291.5 million, a seventh straight weekly gain, bringing stockpiles up 12 million barrels in the past three weeks alone as Gulf of Mexico supply recovers from September’s Hurricane Ivan.
The International Energy Agency (IEA) said earlier on yesterday that rising world supplies and signs that higher energy costs are hurting economic growth suggest oil’s long price surge may finally have peaked.
Oil stocks in industrialized nations will build counter seasonally by 1.3 million bpd in the fourth quarter if OPEC keeps producing at 30 million barrels per day, its highest level since 1979, the IEA said.
Meanwhile, the euro hit an all-time high yesterday against the greenback, reaching over 1.30 dollars, but then retreated as dealers digested a sharper-than-expected drop in the US trade deficit.
After peaking at 1.3005, the single European currency slipped back to 1.2905 dollars in late European trading from 1.2897 late on Tuesday in New York.
The dollar rose to 106.95 yen from 105.65 on Tuesday.
