|NEW YORK - Oil futures rose moderately Wednesday as traders shrugged off a mixed government inventory report and focused on the economy and threats to crude supplies overseas.
The report from the Energy Department's Energy Information Administration said heating oil supplies were higher than expected last week but that crude oil and gasoline stockpiles grew less than analysts predicted. That left energy markets relatively unchanged, and traders quickly looked past the report to the stock market and Venezuelan President Hugo Chavez's threat to cut off oil sales to the U.S.
Wall Street rallied after the Commerce Department said retail sales rose unexpectedly last month. Energy investors often view the stock market as a barometer of economic health, worrying that any slowdown in growth will lead to a corresponding slump in energy demand.
"Whenever you get the stock market up, it's another reason to (buy) oil," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Investors were also heartened by President Bush's signing Wednesday of the $168 billion economic stimulus package that will send tax rebate checks to millions of Americans. Oil prices have fallen from a January record above $100 a barrel largely on concerns about economic growth and falling demand for oil and gasoline.
Light, sweet crude for March delivery rose 49 cents to settle at $93.27 on the New York Mercantile Exchange.
Traders remain concerned about Chavez's threat. On Tuesday, Venezuela's state-owned oil company, Petroleos de Venezuela SA, said it would halt crude sales to Exxon Mobil Corp. in response to the company's court bid to freeze billions of dollars in Venezuelan assets. Exxon Mobil is challenging the nationalization of its Venezuelan oil ventures.
"There's still a lot of uncertainty with how this Venezuelan situation's going to affect us," Flynn said.
In its report, the EIA said inventories of distillates, which include heating oil, dropped by 100,000 barrels last week, much less than the 1.2 million barrel decline analysts surveyed by Dow Jones Newswires had forecast. On the other hand, crude oil supplies grew by 1.1 million barrels last week, less than the expected 2.7 million barrel increase. Gasoline inventories rose by 1.7 million barrels, slightly below forecasts.
"It seems fairly neutral to me," Brad Samples, an analyst with Summit Energy Services Inc., in Louisville, Ky., said of the report.
Demand for gasoline, meanwhile, was tepid, analysts said, rising by 104,000 barrels last week, and up only 0.4 percent over the last four weeks compared to the same period last year. Most analysts consider a year-over-year increase of 1.5 percent to be normal.
Also Wednesday, the International Energy Agency cut its oil demand forecasts for this year due to the weakening U.S. economy. The agency, an energy policy adviser to mostly Western industrialized nations, said world oil demand will grow by 1.7 million barrels a day this year, rather than by the 1.98 million barrels a day it forecast in January.
At the pump, meanwhile, gas prices rose 1.1 cent overnight to a national average of $2.972 a gallon, according to AAA and the Oil Price Information Service. Retail prices, which typically lag the futures market, are responding to a slight bounce in the oil market. Crude futures rose more than $6 between Thursday and Monday on concerns about overseas supply disruptions.
Other energy futures were mixed Wednesday. March heating oil futures rose 2.45 cents to settle at $2.6156 a gallon on the Nymex, and March gasoline futures rose 2.19 cents to settle at $2.3899 a gallon. March natural gas futures slipped 4.8 cents to settle at $8.388 per 1,000 cubic feet.
In London, Brent crude futures for March delivery rose 46 cents to settle at $93.32 a barrel on the ICE Futures exchange.