|Analysis||Black gold market prices rallied yesterday as a result of a weak federal currency against major currencies, and as commodities are priced in dollars it becomes cheaper as an investment for investors holding a stronger currency. Also oil prices were supported from the upbeat U.S. economic data revealing that the U.S. economy shed fewer jobs that it was presumed, and this helped restored optimism in markets especially since the U.S. is known as the world's biggest crude consumer. The contract gained $2.12 closing at $71.69 while recording a high of $72.55 per barrel and a low of $69.17 per barrel.|
The U.S. stock markets closed in the green territory on better than predicted job data from the economy while Alcoa Inc. posted higher than estimated profits for the first time this year. From the rising confidence in markets, investors were encouraged to enter stock markets, turning to oil shares we see that Exxon Mobil gained 0.38 points or 0.55% to $69.05, Chevron Corp. rose 0.94 points or 1.33% to $71.45 while ConocoPhillips leaped 1.71 points or 3.44% to $51.41.
The EIA report was released Wednesday showing that the U.S. commercial crude oil inventories decreased by 1.0 million barrels from the previous week. At 337.4 million barrels, U.S. crude oil inventories are above the upper boundary of the average range for this time of year. Total motor gasoline inventories increased by 2.9 million barrels last week, and are above the upper limit of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories increased by 0.7 million barrels, and are above the upper boundary of the average range for this time of year.
Today, prices are reversing their gains as a result of the dollar climbing in the markets now which is making the oil as an investment more expensive. As the appeal of commodities is reduced, means that lower funds enter the oil markets which therefore weighs on oil prices as today the markets opened at $71.42 while recording a high of $71.59 per barrel and a low of $70.95 per barrel.
Once again my dear reader, our point of view remains the same as the global recession is a much heavier factor on the oil markets than any upbeat data and this will keep prices pressured to the downside in the medium and long run.