|Previous||1.8 million barrels|
|Forecast||0.8 million barrels|
|Analysis||As the dollar extended its gains in the markets versus major currencies, as a result of worries aroused again after industrial production dipped in the U.S. economy, had investors seeking lower yielding assets which therefore supported the dollar. Although we are seeing a strong dollar weigh on oil prices since commodities are priced in dollars, we saw that oil prices still rose led from mixed economic data regarding oil demand. The contract gained $0.24 closing at $79.14 while recording a high of $79.73 per barrel and a low of $78.14 per barrel. |
The U.S. stock market climbed for a third day as a result of higher metal prices which supported commodity producers therefore overshadowed a decline in U.S. industrial production. Looking at oil shares we see that Exxon Mobil climbed 0.60 points or 0.80% to $75.03, Chevron Corp. rose 0.20 points or 0.25% while ConocoPhillips shed 0.15 points or 0.27% to $53.69.
The EIA report is scheduled to be released from the U.S. economy with expectations showing that oil inventories will rise 0.8 million barrels. The American Petroleum Institute (API) released its crude inventories yesterday showing that oil stocks dipped 4.4 million barrels while they were projected to incline 1.2 million barrels. As a result of the API report, hinted that demand is slowly recovering therefore is supporting oil prices until today as the markets opened at $79.38 recording a high of $79.85 per barrel and a low of $79.27 per barrel.
Since we are seeing oil prices jump, from our opinion, this rise is just temporarily as still the major highlight in crude markets is the global recession that is pressuring oil prices heavily to the downside which means that prices in the medium and long run will decline once again.