NewsEIA ReportPrevious0.2 million barrelsForecast0.2 million barrelsAnalysisCrude this morning stabilized around $69 per barrel supported by the API's reported drop in motor gasoline inventories, where it managed to increase optimism over the prospects for rising consumption amid the summer driving season. 

As for today, crude futures slightly rose to cover yesterday’s losses by 2.1%. This comes after the weekly API report yesterday that showed a drop in motor fuel inventories by 3.19 million barrels. The support in the US session was also seen across the market as the Dow Jones Industrial Average managed to close higher by 0.2% after dropping as much as 292 points during the session.

The drop in motor fuel inventories yesterday supports expectations of improving inventory levels in today’s EIA report; median estimates expect an unchanged 0.2 MB buildup in crude inventories last week matching the previous.  

Moreover, crude continued to be negatively affected by the prevailing pessimism over the extending European Debt Crisis which might affect the overall prospects for global economic recovery. The euro slumped versus the dollar increasing risk aversion following the announcement of plans regarding four Spanish banks to merge which increased the risk of the spread in the crisis across the nation and the inability to control its deficit due to fragile and ailing banking sector.  

Amidst the escalating European debt crisis; the Italian government also agreed on 24 billion euros austerity measures to reduce general expenditure and calm down markets in attempt to rein on its huge deficit and maintain stability in the European Monetary Union (EMU). However, this until now was not able to halt the euro's depreciation, where the pair declined in the Asian session to trade around 1.2285.

This month crude futures plunged by 21% from its high levels around $87.15 per barrel on May 03, due to ongoing effects of the European debt crisis that was sparked by Greece.

Crude opened yesterday around $69.80 per barrel recording its highest around $70.00 and lowest around $67.15 per barrel, where it managed to close around $69.95 per barrel.

The S&P GSCI index settled yesterday around 465.46 dropping by 8.33 points; whereas the RJ/CRB Commodity Index also plunged by 3.18 to close around 248.79.

As for NYMEX as of 02:44 EST; motor gasoline futures gained to record $194.570 per gallon by $1.490; heating oil is trading around $188.170 per gallon after ascending by $1.000; whereas natural gas also added $0.020 to trade around $4.071 per 1000 cubic feet. In London, Brent rose by $0.470 to $70.02.

Crude opened today around $70.00 recording so far its highest of $70.10 and lowest of $69.20 per barrel, while currently trading around $69.25 per barrel.