|Analysis||Oil little changed today after yesterday's drop ahead of the release of GDP for the third quarter in the world's no.1 crude consumer. Yesterday, prices fell 2.6% after the release of the EIA report which showed a rise in U.S. gasoline stockpiles the previous week.|
The report showed that U.S. commercial crude oil inventories increased by 0.8 million barrels from the previous week. At 339.9 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 1.7 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories decreased while blending components increased last week. Distillate fuel inventories decreased by 2.1 million barrels, and are above the upper boundary of the average range for this time of year.
Although the report included negative and positive details but investors are waiting for strong recovery signs which prompted them to sell the commodity and continue locking profits after the previous rally to the highest level in a year above $81 a barrel.
After the vivid recovery signs that appeared recently, data started to show some volatility which underscored concerns with regard the strength of the recovery. The economic woes prompted investors to leave risky assets. U.S. stocks slipped yesterday after the weak U.S. economic data concerning consumer confidence and housing. Eyes today are on the third-quarter's GDP which is expected to give a clear picture about recovery.
Today, Asian stocks dropped also where Nikkei Index closed at the lowest level in three weeks below 10,000 points. On the other hand, the U.S. dollar strengthened for the fourth day yesterday, but it slipped today against a basket of major currencies as indicated by the dollar index which plunged to 76.30 compared with the opening at 76.43. The dollar's incline this week eroded demand on commodities.
Now, oil is traded at $77.40 recording a high of $77.45 and a low of $77.02, whereas the contract on Wednesday shed $2.09 closing at $77.46, while recording a high of $79.83 per barrel and a low of $77.06 per barrel.