NewsCrude dropped below $78 pressured by the rise in US inventoriesPreviousForecastAnalysisCrude dropped this morning below $78 per barrel pressured by the rise in US inventories at a worst pace in the previous three weeks; reflecting ongoing weak and instable demand level on crude from the largest energy consumer in the world.

Yesterday’s weekly EIA report showed a rise in inventories by 1.7 million barrels compared to the previous drop of 1.8 million barrels, crude inventories reached 363.1 million barrels, above the medium term average range for this time of year. On the other hand, motor gasoline inventories fell by 0.6 million barrels last week but still remains above the medium term average range; while distillate fuel that includes heating oil gained 1.8 million barrels and also above the medium term average range for this time of year.

The report also showed a plummet in motor fuel inventories last month recording its lowest in over twelve months; thus preventing crude from dropping yesterday, as demand on the fuel managed to rise by 1.6% to 9.34 million barrels daily, the highest since the week ending August 28. 

Moreover, crude yesterday were affected by weak performance in the housing sector, thereby inducing doubt around the strength of the economic improvement. The US Department of Commerce yesterday reported that new home sales slipped by 10% reaching 593 thousand housing units compared to 672 thousand housing units.

Crude opened yesterday around $77.05 per barrel after recording its highest around $78.10 and lowest around $76.50 per barrel, while closing trades around $77.50 per barrel.

The S&P GSCI index closed yesterday around 511.52 after climbing 3.57 points; whereas the RJ/CRB index closed around 264.15 after gaining 0.65 points.

As for NYMEX as of 02:10 EST; motor gasoline traded at $214.520 per gallon after dropping by $0.740; heating is trading around $210.270 per gallon falling by $0.740; whereas natural gas gained by $0.046 to record $5.024 per 1000 cubic feet. In London, Brent dropped by 0.140 points to record 77.900.

Crude opened today around $77.27 per barrel recording its highest around $77.45 and lowest around $76.85 per barrel, while currently trading around $77.15 per barrel.