NewsEIA ReportPrevious2.4 Million BarrelsForecast0.5 Million BarrelsAnalysisCrude rose this morning above $74, supported by global stock indices ascending and motor fuel inventories dropping to its lowest this year, according to the API report.
Crude inventories yesterday dropped, according to the API report, by more than market expectations with 217.2 million barrels; whereas motor fuel slipped 962 million barrels due to dropping inventory levels supported by the summer season start in the US.
Demand on motor fuel gained by 3.7% last week it’s highest since August 2007 after consumers filled up on gas for Memorial Day. The EIA report is expected today to also report a drop in commercial crude inventories by 0.5 million barrels, compared to the previous 2.4 million barrels while forecasts point to crude plummeting lower than expectations.
In addition, crude oil was supported by Asian stock indices today after the dollar’s climb that led the Dow Jones yesterday to close higher by 2.2%; whereas the S&P 500 also advanced after pending home sales recorded its highest level since last October.
Eyes are currently set on the US Jobs report tomorrow, where it is expected to show an improvement in US labor market. In the past few months, improvements have been noted in the US economy, thereby supporting demand on crude from the largest energy consumer in the world.
European stock markets yesterday were sharply affected by British Petroleum shares plunging after numerous attempts were taken to stop the oil leak in the Gulf of Mexico. In response, the US has expressed its anger towards the situation and had opened an investigation regarding the oil leak that had led to an explosion of one of BP’s oil rigs.
Moreover, news regarding BP plc selling its most valuable assets is increasing, including its share in the largest oil field in the US, due to cleanup costs and fees it must pay for the biggest oil leak in US history.
Crude opened yesterday around $71.90 recording its highest around $73.90 and lowest around $71.65 per barrel, while closing around $73.65 per barrel.
The S&P GSCI index closed yesterday around 482.98 after gaining 1.88 points; whereas the RJ/CRB index also rose by 0.55 points to close around 252.39.
As for NYMEX as of 03:00 EST; motor gasoline futures ascended recording $206.170 per gallon by $3.560; heating oil is trading around $203.810 per gallon after rising by $3.220; whereas natural gasoline climbed by $0.022 to record $4.446 per 1000 cubic feet. In London, Brent rose by $1.350 to record 75.100.
Crude today opened around $73.65 recording its highest around $74.40 and lowest around $73.42 per barrel, while currently trading around $74.15 per barrel.