SMALL RISE SEEN IN U.S. GASOLINE INVENTORIES
U.S. analysts expect the American
Petroleum Institute's weekly report on oil inventories to show
a slight build in U.S. stocks of gasoline for the week ended
May 29, oil traders and analysts said.
    While the consensus is for an increase, a few would not
rule out the possibility of an decline. Traders said that
barring any surprises in tonight's report, they expect the
report to be neutral to bearish for oil prices.
    Heating oil stocks are also likely to build and runs to be
steady to slightly higher, which could add pressure on oil
prices, the analysts said.
    Crude oil was seen likely to build assuming imports
continue at relatively high levels.
    Analysts expect gasoline stocks to rise 500,000 to two mln
barrels above the 234 mln reported for May 22.
    Peter Beutel, oil analyst with Elders Futures inc, who
looks for a build said, "We have had five weeks of gasoline
demand at 7.3 mln bpd or more and it is likely to taper off to
between 6.7-7.0 mln bpd, which should make stocks build. Demand
would have to stay above 7.0 mln bpd to have a draw," he added.
    Rising demand is why oil traders and analysts expect a draw
in stocks of about of about one mln barrels.
   
    The U.S. Energy Information Administration in its latest
report for the four weeks ending may 22 said that gasoline
demand was up 4.4 pct to 7.3 mln bpd from the previous year.
    But analysts said hopes of reduced stocks is likely to
founder on increased runs in refineries, which could be up 0.3
pct above May 22's 81.2 pct capacity operated.
    Such an increase would raise runs about 100,000 bpd and add
to U.S. stocks.
    But some analysts said that refiners may have held refinery
runs.
    Heating oil stocks were also expected to build between
700,000 barrels and one mln from the 96 mln barrel level
reported last week, but a rise in distillate stocks was
discounted as having a market impact at this time.
    "A build is seasonal now and not out of line with last year,"
one futures analyst said.
    Analysts said they also expect crude oil stocks to build
between 1.5 mln barrels and three mln from the 325 mln barrels
reported by API for the week of may 22.
    The consensus appears for about two mln barrels to be added
to the nation's inventory.
 Reuter
