By Dan Strumpf Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Oil futures gave back gains Wednesday after a government report showed U.S. oil stockpiles rose for a fifth straight week.
Light, sweet crude for May delivery rose 10 cents, or 0.1%, to $108.44 a barrel on the New York Mercantile Exchange. The contract advanced to a two-and-a-half-year high of $109.15 earlier in the session before reversing course following the Department of Energy's weekly report released at 10:30 a.m. EDT. Brent crude on the ICE futures exchange recently fell 17 cents, or 0.1%, to $122.05 a barrel.
Trading volumes for Brent, whose price has steamed ahead of the Nymex contract this year, outpaced volumes for Nymex's West Texas Intermediate crude for the second straight session Wednesday.
The DOE's Energy Information Administration said oil inventories rose 2 million barrels last week. Gasoline inventories slipped 400,000 barrels, while distillate stocks, including heating oil and diesel, rose 200,000 barrels. Refinery utilization rose 0.3 percentage point to 84.4%.
Analysts surveyed by Dow Jones Newswires expected a slightly smaller increase in crude stockpiles. They saw oil stocks rising 1.6 million barrels. Stocks of gasoline were seen falling 1.7 million barrels, while supplies of distillates were expected to fall 300,000 barrels. Refinery utilization was seen climbing 0.6 percentage point to 84.7% of capacity.
"The market's kind of in no man's land here," said Tom Bentz, director at BNP Paribas Commodity Futures in New York. "It made the new high, it's getting a little bit overbought and it's starting to get a little bit of a correction."
Oil stocks in the U.S. have risen more than 22 million barrels since the beginning of the year, according to the EIA.
In Cushing, Okla., the delivery point for the Nymex's WTI contract, inventories were unchanged at a record-high 41.9 million barrels. Brimming oil tanks at the Oklahoma town have kept WTI trading at a steep discount to Brent crude--the contract used widely in Europe--in recent months.
The differential was about $14 a barrel Wednesday. Typically the two contracts trade within a $1 of each other. The two contracts traded in opposite directions Tuesday, as fighting in Libya caused traders to bid up the Brent contract, while elevated Cushing stocks kept WTI under pressure.
The fighting in Libya remains a major focus for oil market participants. The country's civil war has caused some 1.3 million barrels a day of mostly Europe-bound crude to be removed from the market, causing a surge in oil prices over the last month.
Despite the civil war in Libya, some oil exports have resumed from the country, Didier Houssain, director of energy supply and markets at the International Energy Agency, told Dow Jones Newswires. However, the fighting continues to cause a "significant disruption to its oil supply," he said.
However, the rebels' recent victory in Brega, an important oil town that has changed hands several times since the civil war began in mid-February, could prove a source of revenue for the cash-starved rebels. Marking the first export of crude since winning recognition from some Western governments, a tanker filled with oil left the Libyan port of Tobruk Wednesday, AFP reported.
Front-month May reformulated gasoline blendstock, or RBOB, recently fell 1.28 cents, or 0.4%, to $3.1885 a gallon. May heating oil added 0.38 cent, or 0.1%, to $3.1888 a gallon.
-By Dan Strumpf, Dow Jones Newswires; 212-416-2818; dan.strumpf@dowjones.com.
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