* Fed's Bernanke testimony seen downbeat, weighs on oil
* EIA report shows surprise rise in crude oil inventories
* NHC lowers probability of tropical depression forming
* Coming Up: U.S. home loans data on Thursday at 1400 GMT
(Recasts, updates prices, market activity)
By Robert Gibbons
NEW YORK, July 21 (Reuters) - Oil prices fell more than 1
percent on Wednesday, slumping after two straight higher closes
on Federal Reserve Chairman Ben Bernanke's expressions of
concerns about the economy and on data showing U.S. crude oil
inventories unexpectedly rose last week.
Bernanke said the U.S. economy faces "unusually uncertain"
prospects and that the central bank was ready to take further
steps to bolster growth if needed, in testimony before the
Senate Banking Committee. []
"Bernanke's testimony is very depressing to all asset
classes, including crude oil," said Joseph Arsenio, managing
director at Arsenio Capital Management in Larkspur,
California.
Oil prices had already retreated from a 3-1/2 week high
reached in early trading on data showing commercial U.S. crude
inventories rose on rising imports and despite higher refinery
utilization.
U.S. crude oil for September delivery <CLc1> fell $1.02, or
1.31 percent, to settle at $76.56 a barrel, trading from $76.20
to $78.57. London ICE Brent crude futures <LCOc1> fell 85 cents
to settle at $75.37 a barrel.
Heating oil futures <HOc1> fell 3.55 cents, or 1.75
percent, to settle at $1.9892 a gallon, after the EIA data
showed both heating oil and total distillate stockpiles surged.
RBOB gasoline futures <RBc1> fell 1.08 cents, or 0.5 percent,
to settle at $2.0678 a gallon, also amid rising inventories.
OIL STOCKPILES RISE
U.S. crude stocks rose 360,000 barrels in the week to July
16 to 353.46 million barrels, against a forecast stocks would
be down 1.4 million barrels, the U.S. Energy Information
Administration's weekly inventory report showed. []
Rising crude imports, up 696,000 barrels per day to 9.94
million bpd, helped offset a 1 percentage point rise in
refinery capacity utilization.
The increased refinery use pushed gasoline inventories up
1.12 million barrels, more than the forecast build of 900,000
barrels. Distillate stocks jumped up 3.94 million barrels, much
more than the forecast rise of 1.7 million barrels.
"This report was negative across the board, with the
unexpected build in crude stocks and the build in products too
as refineries ramped up production," said Mike Zarembski,
senior commodities analyst at Optionsxpress in Chicago.
Before the EIA data, optimism about the economy reflected
in rising equities markets had lifted oil prices to $78.57,
highest since June 28 when prices reached $79.38 a gallon.
But U.S. stocks ended more than 1 percent lower as
Bernanke's comment that the economy faces "unusually uncertain"
prospects unsettled already skittish investors.
Oil's reversal after the inventory data pulled prices back
below two key technical resistance points: the 200-day moving
average at $77.58, and a trend line connecting several intraday
peaks going back to April 6.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on commodity performance:
http://link.reuters.com/hun72k
To see the latest storm tracks see:
http://www.skeetobiteweather.com/
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
STORM WORRIES
After the inventory report crude prices bounced more than
30 cents on news Shell Oil Co had begun pulling nonessential
staff from Gulf of Mexico operations because of the threat of a
possible tropical storm. []
Later on Wednesday the U.S. National Hurricane Center
lowered to 50 from 60 percent the chance a tropical wave moving
across Hispaniola would form a tropical depression.
[]
Most weather models still projected the system would cross
Florida and enter the Gulf of Mexico.
(Additional reporting by Gene Ramos and Edward McAllister in
New York, David Turner and Joe Brock in London and Alejandro
Barbajosa in Singapore; Editing by Lisa Shumaker)
