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Oil supplies rise slightly
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August 29, 2000: 10:37 p.m. ET
Prices slip ahead of API report showing stocks up 5.26M to 285.96M barrels
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NEW YORK (CNNfn) - Crude oil prices fell slightly Tuesday as traders took profits after weeks of oil rallies ahead of a report showing a slight increase in U.S. oil inventories.
Weekly data from the American Petroleum Institute, released after trading hours, showed crude stocks in the United States rising 5.26 million barrels to 285.96 million barrels in the week ended Aug. 25. That's well below the 317.66 million barrels a year ago.
Distillate fuel stocks, which include heating oil, rose 1 million barrels to 112.22 million barrels last week, but they were also still well below last year's levels of 141.57 million barrels, the API reported.
With supplies so low, analysts said a build of 4 million to 5 million barrels of crude would damp the current price spike.
U.S. light sweet crude futures for October delivery fell 13 cents to $32.74 per barrel on the New York Mercantile Exchange. London's benchmark Brent for October delivery rose 76 cents to $31.15.
 Concerns about heating oil supplies for this winter persist, but October heating oil prices fell 1.02 cent to 98.23 cents a gallon. September unleaded gasoline dipped .45 cent to 97.32 cents a barrel and September natural gas slid 6.7 cents to $4.618 per 1,000 cubic feet.
"There's some apprehension about the report," said Peter Beutel, oil analyst at Cameron Hanover. "If we don't see an increase in distillate inventories, traders are going to ask when we will before winter."
Last week, the API said U.S. crude oil stocks fell 7.78 million barrels to 279.7 million barrels, the lowest level reached since March 1976's 265.8 million barrel level.
OPEC says supplies adequate
Crude oil futures have surged recently as fears mount over potential winter supply shortages in the West. Dealers took fright at the latest comments from OPEC, as well, after OPEC President Ali Rodriguez blamed high taxation among consumer nations and refinery bottlenecks for soaring prices.
Rodriguez told reporters Monday that the supply of crude from the Organization of the Petroleum Exporting Countries was adequate and that the cartel could not be held responsible for current oil price movements.
"There is no problem with crude supply. Prices do not depend exclusively on OPEC," Rodriguez said.
The United States is calling on OPEC to raise supply and help take the steam out of high prices, which are settling inflation nerves jangling in a U.S. presidential election year.
Traders in New York Monday sent heating oil futures soaring above a dollar a gallon -- a price not seen since October 1990 as Iraqi forces occupied Kuwait during the Gulf crisis -- on the back of extremely low refined product inventory levels.
U.S. inventories of heating oil are far below 1999 levels. And those 1999 levels were sparse enough to force federal subsidies for some poor families in the Northeast as they reeled from high heating oil costs.
"Heating oil inventories are a far cry from what they should be at this time of year and (traders) don't think we're going to catch up in time for winter," said Tom Bentz of Paribas Futures in New York.
Nationwide, heating oil stocks are down 39 percent from this time a year ago. In the Northeast, the largest heating oil market in the world, stocks are down to about 20 million barrels, compared with about 45 million barrels a year ago, according to the API.
OPEC meets on Sept. 10 and is expected to increase supply quotas by at least 500,000 barrels a day (bpd). But traders warn that more may be needed to avert supply problems this winter.
OPEC has an informal mechanism allowing for a 500,000 bpd increase if the price of a basket of seven crudes stays above a $22-to-$28 band for 20 working days. It has been above the range for 11 straight days up to Monday, and the 20th working day will coincide with OPEC's Sept. 10 conference. 
-- compiled from staff and wire reports
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