Black gold prices dipped yesterday, as worries flooded the markets regarding the economic outlook. Thus, meaning that demand on oil was weak, and therefore reduced the appeal of oil markets, causing investors to flee the markets. As investors stepped out of markets, we saw funds flowing out, which led prices to plummet, despite the upbeat U.S. data regarding the manufacturing sector and the housing data. The contract shed $1.91 closing at $68.05, while recording a high of $71.37 per barrel and a low of $68.00 per barrel.
U.S. stock shed points; extending losses despite the better than projected economic data, as investors are worried about the performance of financial institutions, where this weighed on the stock markets as investors became pessimistic and avoided higher yielding assets. Turning to oil shares; we saw that Exxon Mobil dipped 0.74 points or 1.07% to $68.41; ConocoPhillips fell 0.88 points or 1.95% to $44.15; while, Chevron Corp. declined 1.46 points or 2.08% to $68.48.
Today, oil prices are slightly rising, especially since the American Petroleum Institute (API) yesterday; released its oil reports, showing that oil inventories dipped 3.2 million barrels last week, which was more than the expected decline of 1.9 million barrels, meaning that despite the ongoing recession in the U.S. economy, energy products were still demanded. Investors are eyeing the economy carefully, since it is the world's largest crude consumer, while the markets today opened at $68.20, while recording a high of $68.65 per barrel and a low of $68.01 per barrel.
The EIA report is scheduled to be released today, with expectations showing that U.S. oil inventories will plunge 0.8 million barrels; meaning demand is improving in the U.S. economy and will boost prices in the short term, while in the long term prices are being pressured from the global downturn, causing them to plummet.