NewsCrude oil plummets below $76 after US inventories risePreviousForecastAnalysisCrude futures receded this morning below $76 per barrel due to effects of higher than expected US inventory levels, which reflect weak demand from the largest energy consumer in the world.

The release of the EIA report yesterday showed a rise in crude inventories by 1.9 million barrels compared to the previous 2.8, higher then expectations of 1.0 as current inventory levels reached 362.5 million barrels above the medium term average range for this time of year. Meanwhile, motor gasoline dropped by 2.8 million barrels last week while distillate fuel that include heating gained by 1.4 million barrels, and as well both inventory levels remain above the medium term average range for this time of year.

The continuing rise in crude inventories will stand in the way of demand recovery, which is what the EIA report assured; announcing an evident climb in inventories in last 14 of 15 weeks.

In addition, the EIA report also mentioned yesterday that global oil demand this year is expected to jump 220,000 barrels per day, which was worse than previous expectations.

On the other hand, what currently is attracting investors is rising global demand levels from developing countries, like China and India, which are supporting oil prices. Meanwhile, Asian economic data excluding Japan is reflecting a clear improvement in the recent past period; supporting overall expectations that these leading countries will help the global economy out of the current chaos. 

Moreover, crude opened yesterday around $75.85 recording its highest around $76.96 and lowest around $74.75, where it managed to close around $75.25 per barrel.

The S&P GSCI index settled yesterday at 520.95 after gaining 4.13 points; whereas the RJ/CRB Commodity index followed and rose by 1.87 to close around 266.82.

As for NYMEX as of 02:43 EST; motor gasoline rose to $221.450 per gallon by $0.410; heating is trading around $216.850 per gallon after climbing by $0.940; whereas natural gasoline plunged by $0.004 to record $4.280 per 1000 cubic feet. In London, Brent gained by $0.330 to record $81.530.

Crude opened today around $75.45 per barrel recording its highest around $75.77 and lowest around $75.25, while it currently trades around $75.65 per barrel.