NewsCrude drops in Asia on fears over growth and stocks declinePreviousForecastAnalysisCrude fell today below $75 per barrel on fears of slowing Chinese economic growth because of the government intervention; causing a negative effect on crude oil from the second largest energy consumer in the world.
Crude this morning was effected by the drop witnessed in the Asian stocks indices, especially after the two largest copper producing companies’ in the world announced that the Chinese government will be applying a growth limit, which will negatively affect demand.
On the other hand, crude inventory levels declined according to the EIA report, where crude oil last week plunged more than market expectations, higher than the median estimates of 0.5 million barrels.
The weekly EIA report yesterday showed a drop in crude inventories by 1.9 million barrels compared to the prior reading of 2.4 million barrels, higher than expectations of -0.5 million barrels, where crude inventories currently are around 263.2 million barrels above the medium term average range for this time of year. Motor gasoline also plunged by 2.6 million barrels last week but remain above the medium term average. Nonetheless, distillate fuel that include heating oil rose by 0.5 million barrels above the medium term average for this time of year.
Crude opened yesterday around $73.65 per barrel recording its highest around $74.90 and lowest around $72.30 per barrel, to close around $74.50 per barrel.
The S&P GSCI index closed yesterday around 490.01 after gaining 7.03 points; whereas the RJ/CRB index also rose by 1.95 points to close around 254.89.
As for NYMEX as of 03:00 EST; motor gasoline futures dropped around $207.500 per gallon by $0.620, heating oil is trading around $203.080 per gallon after falling by $0.830, while natural gasoline fell by $0.007 to record $4.683 per 1000 cubic feet. In London, Brent slipped 0.220 points by $75.190.
Crude opened today around $74.52 recording its highest around $74.75 and lowest around $74.10 per barrel, while currently trading around $74.30 per barrel.