NewsCrude drops this morning due to the worse than expected rise in US inventoriesPreviousForecastAnalysisCrude futures receded this morning below $80 per barrel after the euro versus dollar dropped to its lowest level since March last year, while renewed fears are appearing in markets due to the spread of the budget crisis throughout the European continent. the rise in US inventories more than expected adding more assurances of continued weak US demand on black gold all pressuring oil to the downside.
Meanwhile, crude oil yesterday managed to fall by 3.4% after euro versus dollar plunged to 1.2807, the lowest since nearly 13 months, due to the effect of the aid package offered to Greece from the EU and IMF worth 110 billion euros and the fact that it is not enough to prevent budget deficit crisis epidemic spreading to other countries.
The release of the EIA report yesterday showed a rise in crude inventories by 2.8 million barrels compared to the previous 1.9 MB and higher than expectations of 0.6 million barrels, where inventories are currently around 360.6 million barrels above the average range for this time of year. Meanwhile, motor gasoline gained by 1.2 million barrels last week and are still above the average range. In addition, distillate fuel that includes heating, also rose by 0.6 million barrels above the medium term average range for this time of year.
Furthermore, they said that crude imports have risen by 2.8% to 9.95 million barrels per day, its highest since the week ending on July 24, 2009. The fact that US imports and inventories maintain rising only signals the ongoing weakness in demand, pushing prices to continue dropping.
Dear reader, it is evident that global markets all around the world are currently facing numerous obstacles starting with the European debt crisis that has started to drag down other countries with it; therefore, increasing the possibility of it gradually spreading until the world is effected in another devastating economic recession! The ongoing fears will maintain the drop in markets until decision makers come up with a solution for this dilemma.
Crude futures opened yesterday around $82.15 recording its highest around $82.80 and lowest around $79.12, where it closed trades around $79.55 per barrel.
The S&P GSCI index closed at 521.81 after plunging by 13.86 points; whereas the RJ/CRB commodity index fell by 3.65 points to close around 267.95.
In NYMEX as of 03:15 EST; motor gasoline dropped to $221.370 per gallon by $0.670; whereas, heating oil is trading around $217.200 per gallon after plunging by $0.023 to record $3.968 per 1000 cubic feet. In London, Brent plummeted by $0.510 to record $82.00.
Crude opened today around $79.55 recording its highest around $80.30 and lowest around $79.37, where it is currently trading around $79.45 per barrel.