Weekly report on oil inventory showed that crude oil inventory declined for the seven week in a row. Crude oil inventories declined 0.9 million barrels, gasoline inventories fell by 0.3 million barrels and distillate inventories edged lower by 0.7 million barrels at the end of last week. The EIA reported today that natural gas inventories fell by 22 billion cubic feet at the end of last week.

Oil continued to climb on the inventory report and tensions in the Middle-East. Oil rose 52 cents to trade at mid-day at $64.60 per barrel, new six-month high and gasoline price at gas stations are up 20% for the year and averaging at $2.603 per gallon.


11:15AM NY – CarMax profit rises 15% missing the analyst estimates.

CarMax (KMX) reported fourth quarter fiscal 2007 earnings of 19 cents per share compared to 17 cents per share a year ago on revenue rise of 16% to $1.9 billion. The company reported earnings of $42.1 million in the fourth quarter compared to $36.7 million a year ago. Consensus estimate for the earnings was 20 cents, according to analysts surveyed by 123jump.com.

The company guided for the fiscal 2008 earnings per share between $1.03 and $1.14 and expects same store sales growth to be between 3% and 9%, lower than 13% growth in fiscal 2007. Net profit in the fourth quarter declined to 2.2% from 2.3% from a year ago.

The company expects to open 13 stores in the fiscal 2008 and plans to spend $300 million up from $192 million from the fiscal year. Comparable unit store sales 12% for the fourth quarter and 9% for the fiscal year 2007.

The auto finance unit revenue rose in the quarter 1.7% to $32 million and up 1.8% to $133 million for the fiscal year 2007. Gross profit per vehicle declined $60, to $2,651 in the quarter, from the previous year.

10:30AM NY – U.S. Steel buys Lone Star Technologies for $2.1 billion.

Lone Star Technologies (LSS) has agreed to be acquired by U.S. Steel (X) for $67.50 per share, 39% premium from yesterday’s close. The Lone Star stock jumped $17.92 or 37% at the opening. Total purchase price estimated at $2.1 billion.

U.S. Steel, with this acquisition, will be the largest oil pipes and tubes manufacturing company in the North America manufacturing 2.8 million tons of tubular products, according the company.

U.S. Steel is known for its seamless steel oil tubes manufacturing and Lone Star is known for its welded tubular products and services. The combined operation will strengthen the tubular products portfolio of U.S. Steel and strengthen its position in the oil field service sector. The company projects that combined operations will save $100 million per year before taxes by the year 2008.

Luxembourg based Tenaris S.A. (TS), largest maker of seamless oil tubes and products last month completed acquisition of Hydril Corp, maker of valves and metering equipment for oil flows and completed purchase of Maverick Tube Corp in October for $ 2.8 billion.

High level of oil drilling activity around the world is likely to continue for at least three years, however, the oil exploration and drilling costs have risen considerably in the last four years.

9:15AM NY – U.S. stocks are expected to open higher on upward revision of fourth quarter GDP growth.

Stocks in New York trading are likely to open higher with futures indicating 25 to 30 points premium at the opening. Fourth Quarter GDP growth rate was revised to 2.5% from the previous estimate of 2.2% by the Commerce Department.

Crude oil in London trading is up 15 cents to $64.23 per barrel. European stocks are trading higher across the region on expectations that the U.S. market will rebound in the morning trading. Italy, France, Germany and the UK are trading 1% higher at mid-day trading. Airlines and auto stocks led the rebound.

In overnight trading in Asian markets gained led by a small rise in Japan. Hong Kong led the region with a gain of 1.37% and India advanced 0.74%.

5:00AM Gold advances on Wednesday supported by a surge in oil prices.
June gold advanced $4.10 to $672.90 a troy ounce on the New York Mercantile Exchange and May silver also gained 17.5 cents to finish at $13.455 an ounce. July platinum rose $5.80 to close at $1,257.80 an ounce, while June palladium gained $1.85 to finish at $357.85 an ounce. The most-active May copper contract added 0.50 cent to settle at $3.0625 per pound.

The front-month May crude oil contract advanced $1.15, or 1.8%, to finish at $64.08 a barrel, the highest settlement for a front-month contract since Sept. 11, 2006. April heating oil also gained 4.1 cents, or 2.3 percent, to end at $1.8274 a gallon. April reformulated gasoline blend stock for oxygenate blending fell 1.58 cents, or 0.8%, to finish at $2.0572 a gallon. April natural gas futures finished 5.5 cents higher at $7.558 a million British thermal units, the highest front-month settlement price since Feb. 23.