NEW YORK – Crude-oil prices rose Wednesday after a U.S. petroleum inventory report showed an increase in crude stocks but a drop in distillate fuel inventories and refinery output — which are being closely watched as colder-than-usual temperatures hit many parts of the United States.
Light, sweet crude for January climbed 23 cents to $61.60 a barrel on the New York Mercantile Exchange.
In the Department of Energy's weekly petroleum stocks report Wednesday, crude inventories rose 900,000 barrels in the week ending Dec. 9 to 321.2 million barrels, 11.7 percent above year-ago levels and well above the upper end of the average range for December.
U.S. stocks of distillate fuels, which include heating oil and diesel, slipped 100,000 barrels to 130.5 million barrels. Distillate inventories remain 5.2 percent above year-ago levels.
A survey of analysts by Dow Jones Newswires had predicted crude oil stocks to fall by 790,000 barrels and distillate inventories to fall by 20,000 barrels.
Heating oil rose 2 cents to $1.8575 a gallon in morning trading, while gasoline rose a penny to $1.6560 a gallon.
U.S. gasoline stocks rose 1.8 million barrels to 204.4 million barrels, the Energy Department's report said.
Natural gas, which reached an all-time intraday high of $15.78 per million British thermal units on Tuesday, fell 65.8 cents to $14.72.
Supplies of distillate fuel, as well as natural-gas storage, have been under heavy scrutiny in recent weeks as many regions in the United States have seen temperatures well below the average for this time of year.
The report also said that refinery output slipped to 89.6 percent last week from 91 percent the previous week, which also spooked traders worried about heating oil supplies amid predictions of another major U.S. winter storm.
On Wednesday, forecaster Accuweather Inc. said a pair of storms straddling the East Coast will cause the "second major winter weather scenario in less than a week."
One will bring at least 10 inches of snow in Michigan while another will move up the coast, Accuweather said.
"The most temperature-sensitive products are the gas and the heating oil and that's what's moving the market," said Chris Mennis from brokerage firm New Wave Energy in California.
Cold weather usually causes a rise in demand for heating-related oil products. The Northeast consumes up to 80 percent of total heating fuel used in the country.
On Tuesday, the Paris-based International Energy Agency forecast that world oil demand in 2006 would increase by 1.79 million barrels a day — a 2.2 percent increase on year.
The bulk of the increase is expected in the second half of the year, with the U.S. showing the sharpest increases, the IEA said.
According to the IEA's new medium-term projections, global oil demand is expected to grow 1.8 million to 2 million barrels daily a year through 2010 as China and India continue to expand.
With the world's appetite for crude on the increase, the global buffer of spare oil has rapidly reduced and is partly blamed for the crude price spikes that began last year.
Which has at least one forecast predicting a "super-spike" in prices.
"Resilient energy demand, lackluster supply growth, and nonexistent spare capacity continue to underpin our view that we are in the early stages of a multiyear 'super spike' phase," said Goldman Sachs in its latest energy review.
This year could be the first year of that phase, Goldman Sachs said, which could last five years.