|News||Crude below $77 after rise in U.S stockpiles|
|Analysis||Crude contracts declined this morning below $77 per barrel, after the reported rise in stockpile levels in the US that heavily exceeded expectations. The data revived lingering fears over weak demand from the biggest energy consumer in the world.|
The weekly EIA report yesterday showed a rise in crude stockpiles by 2.3 million barrels, compared to the previous decline by 3.9 million barrels, worse than expectations for a 0.4 million barrels buildup; stockpiles reached 329.0 million barrels, above their average range for this time of the year. Meanwhile, motor fuel dropped by 1.3 million barrels last week and remains above the average range; in addition to distillate fuel, which includes heating oil, dropped 1.0 million barrels and also inventories remain above their range for this time of year.
The EIA report showed a decline in productivity levels in oil refineries to 77.7%, lowest rate since 1989, where imports gained by 7.1% to record 8.43 million barrels per day, highest rate since last September. Though imports have increased, it only added to jitters over the build up in inventories which was echoed with domestic low demand and further agitating expectations over the demand outlook.
Meanwhile, oil prices leaned to the downside after the dollar continued to appreciate reducing demand on commodities as an alternative investment; where the euro versus dollar declined further ahead of the ECB decision amid fears over sovereign debt and currently trading around 1.3850.
The S&P GSCI index closed trading yesterday at 504.12, with 3.16 points drop; the RJ/CRB commodity index followed to record a decline by 2.6 points to close at 270.58.
In other NYMEX trading as of 03:30 EST, heating futures for March delivery recorded $201.380 per gallon down by $0.560; motor gasoline is trading around $202.890 per gallon after dropping $0.730; whereas natural gas contracts ascended by $0.056 to record $5.475 per 1000 cubic feet. As for London, Brent contracts receded by $0.440 to record $75.48.
Crude contracts opened today at $77.05 per barrel, recording its highest at $77.15 and lowest $76.40 per barrel, currently trading around $76.45 per barrel.