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by Stockwatch Business Reporter

West Texas Intermediate crude for February delivery lost 93 cents to $73.32 on the New York Merc, while Brent for March lost 89 cents to $76.16 (all figures in this para U.S.). Western Canadian Select traded at a discount of $11.20 to WTI, up from a discount of $12.50. Natural gas for February added 20 cents to $3.65. The TSX energy index lost a fraction of a point to close at 280.25.

Oil prices rose and then reversed as traders sifted through mixed U.S. supply data. In its latest weekly data release, the U.S. Energy Information Administration (EIA) reported that domestic crude inventories fell by 959,000 barrels last week (to 414.6 million barrels). This exceeded analysts' predictions of a decrease of 184,000 barrels. Oil bulls were nonetheless held in check by an increase in gasoline and diesel inventories, as well as a stronger U.S. dollar (which makes oil more expensive in other commodities, weakening demand).

The greenback even reined in a running of the bulls from a closely watched corner of Oklahoma. According to the EIA data, the Cushing hub -- which is the central crude trading nexus of the U.S. oil industry, being the physical delivery point for WTI futures -- saw its stockpiles plummet by 2.5 million barrels last week to just 20 million barrels. This is their lowest level since October, 2014. In fact, this is about as low as they can get: Below 20 million barrels, the crude is sludgy and low quality (with too much stale sediment and water mixed in) and even dangerous to take out of the tanks (as in-tank fire-stoppers are not designed to get so close to the bottom). The 10-year average for this time of year is around 44 million barrels. Twenty million is considered the minimum operating level.

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