WTI crude gains as stocks rally on rise in U.S. factory orders

Pipeline Plan

Exxon is developing a plan to repair a leak that shut the 96,000 barrel-a-day pipeline system after a spill was discovered March 29 in Arkansas. The line runs 940 miles (1,512 kilometers) from Patoka, Illinois, to Nederland, Texas, and serves refineries around Port Arthur and Beaumont on the Gulf Coast near Texas’ border with Louisiana.

Tomorrow’s EIA report will probably show that U.S. gasoline stockpiles slid 1 million barrels last week, according to the median estimate in the Bloomberg survey. Supplies of distillate fuel, a category that includes heating oil and diesel, fell 1.1 million barrels, the survey showed.

“We’re going to be marking time for the most part until the petroleum inventory data is released,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York.

The industry-funded American Petroleum Institute is scheduled to release separate inventory data at 4:30 p.m. Washington time today. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical unit, for its weekly survey.

‘Oil Aplenty’

“There’s no doubt that there’s oil aplenty in the U.S.,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The rise in U.S. oil output is changing the world energy picture dramatically. The only problem we have is shipping it from place to place, which is why we’re paying attention to the pipeline closure.”

Implied volatility for at-the-money WTI crude options expiring in May was 17.3 percent, down from 17.5 percent yesterday. The figure has slipped from 24.7 percent on Feb. 21.

Electronic trading volume on the Nymex was 441,270 contracts as of 3:40 p.m. It totaled 457,858 contracts yesterday, 19 percent below the three-month average. Open interest was 1.73 million contracts.

Bloomberg News

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