U.S President Barrack Obama yesterday vowed to support small institutions and provide more job opportunities to reduce unemployment that reached a 26-year high of 10.1%. Meanwhile, the feds held rates steady at their low range of 0.0% - 0.25% the lowest since its establishment; while insuring that the US economy is on its way to recovery. In addition, these statements have supported confidence across financial markets and pushed investors towards commodities.
Oil future contracts for March delivery fell throughout U.S trading yesterday by $1.04, after the release of the EIA report; closing at $73.68 per barrel after recording a low of $72.62 per barrel, the lowest since mid December.
The weekly EIA report released yesterday shows a drop in crude stockpiles by 3.9 million barrels, compared to the previous drop of 0.4 million barrels, and opposed expectation for 1.4 million barrels buildup; crude stockpiles reached 326.7 million barrels and are still above their average for this time of year. Motor Gasoline stockpiles increased 2.0 million barrels last week and remain above their average range. In addition, distillate fuel that includes heating oil rose by 0.4 millions barrels and still as well above the average range for this time of the year.
The report also showed a reduction in demand on motor fuel by 0.8% throughout last month, compared to the same period last year. Furthermore, demand levels on heating oil and distillate fuel fell by 8.1%, despite of the ongoing drop in temperature in the US.
Meanwhile, Valero Company, one of the largest oil providers in the US, stated yesterday that the company's losses throughout last year reached $2 billion, due to the spike in prices compared to low consumption levels. However, we await data from Chevron and EXXON for the previous quarter, which are expected to be released next week, where expectations are increasing that their performance also declined.
The S&P GSCI index closed trading yesterday at 492.25, dropping by 7.74 points; whereas the RJ/CRB commodities index receded by 5.12 points to close at 268.76.
As for NYMEX trading as of 03:15 EST, heating oil contracts for March delivery where trading around $192.560 per gallon higher by $0.880; meanwhile, motor gasoline is trading around $193.55 per gallon down $0.370; natural gas contracts fell by $0.015 to $5.209 per 1000 cubic feet. However, in London Brent contracts gained $0.34 to trade at $72.58.
Crude contracts opened today at $73.65 per barrel, recording the highest at $74.15 and lowest at $73.35 per barrel, while currently trading around $74.10 per barrel.