Crude clears $84 despite rise in US inventories, oil and gas stocks gain in London

Crude’s ongoing rally was unaffected by this week’s inventories reports, which both showed build-ups in stockpiles to signal lower demand.
On Tuesday, inventories data from the American Petroleum Institute (API) showed that oil stockpiles added just 421,000 barrels last week, while distillates, which include diesel and heating oil, fell by 1 million barrels and gasoline stocks shed 946,000 barrels. The increase in stockpiles was smaller than expected, however, US Energy Information Administration (EIA) said on Wednesday that oil stockpiles increased by 2.9 million barrels, while gasoline inventories added 300,000 barrels and distillates dropped 1.1 million barrels.
Oil prices were further strengthened by a fall in the US dollar, which has been in decline against the euro this week after the EU agreed on a mechanism to provide Greece with financial aid together with the International Monetary Fund (IMF) if the debt-laden country is unable to raise the sufficient funds from the market. The deal, which was reached late last week, provided Europe’s single currency with immediate relief, though did little to improve the long-term outlook for Europe’s debt crisis, limiting gains in the euro.
The uncertainly over Greece's fiscal situation has been keeping the euro under pressure for weeks, while boosting the appeal of the safe-haven US dollar.
A stronger greenback makes US dollar-denominated commodities such as crude more expensive for holders of other currencies.
May Brent Crude reached US$83.80/barrel, while US light, sweet crude advanced to US$84.80/barrel.
Blue chip oil and gas producers were on the rise today. BP (LSE: BP) gained less than 1% while fellow supermajor Shell (LSE: RDSB) was flat. BG Group (LSE: BG) added nearly 1%, while Tullow Oil (LSE: TLW) gained 1.4% and Cairn Energy (LSE: CNE) took the lead, advancing 3.2%.
Oil and gas engineering group Petrofac (LSE: PFC) rallied 5.5%, while peer Amec (LSE: AMEC) added 1.3%.
Midcaps followed the trend with the exception of Dragon Oil (LSE: DGO), which posted a small loss, and JKX Oil & Gas (LSE: JKX) and Salamander Energy (LSE: SMDR), which were flat.
Melrose Resources (LSE: MRS) and Soco International (LSE: SIA) posted small gains, while Heritage Oil (LSE: HOIL) gained 1%. Dana Petroleum (LSE: DNX) and Premier Oil (LSE: PMO) climbed 2.7% and 1.2% respectively.
Services companies also did well as Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) tacked on 2.7% and 1% respectively.
Junior upstream oil and gas company Aminex (AIM: AEX) and energy investor Xtract Energy (AIM: XTR) went against the tide, slipping 14% and 7% respectively.

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