|Previous||0.4 million barrels|
|Forecast||0.9 million barrels|
|Analysis||Crude oil slipped below $79 a barrel after the release of the American Petroleum Institute (API) report yesterday, which showed a surge in U.S. stockpiles. The report showed that oil inventories climbed to 343 million barrels; gasoline supplies plunged 558,000 barrels to 209.8 million; and distillate fuel stocks fell 998,000 to 167 million.|
A confirmation is awaited with the release of the EIA report later in the day. The decline gives a clue that the demand on energy products weakened again, while the rise in price is overvalued. November's contract expired yesterday at $79.00 a barrel, the highest level in a year.
Yesterday, oil dropped to $79.12 recording a high of $80.40 and a low of $78.32. U.S. stocks sagged on grim U.S. housing data, which outpaced the better-than-expected earnings by large U.S. companies. Asian stocks followed the U.S. suit, falling for the first time after three days of gains on disappointing earnings by China Telecom and Samsung.
In the currency market, the U.S. dollar strengthened on Tuesday increasing to 75.49, according to the dollar index. However, it plummeted again to 75.36 today. The green currency is gaining support at the 14-month low level. The dollar's incline yesterday eroded demand on commodities. S&P GSCI cut 2.80 points to 512.23 and RJ/CRB Commodity edged down 1.52 points to 278.13.
Presently, oil is traded at $79.04 recording a high of $79.06 and a low of $78.46. Oil is expected to face a resistance at $82.00, while gaining support at $75.00.