NewsThe EIA ReportPrevious-0.9 Million Barrels Forecast2.0 Million Barrels AnalysisCrude continues trading below $76 per barrel today due to the steep drop witnessed in stock markets as traders remain jittery, on expected derailing improvement in the global economy and the US. Nonetheless, with the dollar’s drop today oil’s appeal improved slightly as an alternative investment advancing slightly especially ahead of the EIA report expected with a drop in inventories.

Crude today is trading around $76 recording its highest around $76.25 and lowest around $75.33 per barrel. Meanwhile, yesterday the black gold traded around $78 recording its highest around $78.32 and lowest around $76.90 per barrel.

The wave of pessimism that overshadowed stock markets yesterday extended into US markets as the DJIA slipped 2.65%; the downbeat Chinese data was followed by a drop in consumer confidence taking a blow to 52.9 in June from 62.7 in May; thus reflecting the shaky US economic recovery feeding fears over the outlook.

Fears regarding China’s erratic growth are also negatively impacting global indices, alongside Europe’s exasperating debt crisis dragging down the global economy’s recovery. All are weighing on crude as investors slim expectations for demand as the global recovery slow.

On the other hand, crude remains suffering the effects of hurricane Alex where the US National Hurricane Center said that the tropical storm was heading west across the Mexican gulf threatening crude rigs in the region, where it is also expected to reach land northeast of Mexico and southern Texas later on today. Though the expected hurricane might miss major production areas, it still supported crude to the upside today with the ongoing evacuation from the likes of BP and Royal Dutch Shell.  

The S&P GSCI Index closed yesterday around 493.66 recording a drop by 14.71 points; whereas the RJ/CRB Commodity Index closed around 256.27 dropping by 7.26 points.

Ahead of the US Jobs report expected on Friday, we are awaiting the ADP report today which expected to show the recovery pace in the world’s largest economy is still stagnant. The weak jobs figures are likely to offset the upside effect seen from the expected drop in inventories today.  

Yesterday, the API reported a slide in US inventories from the previous week by 3.4 MB, higher than the previously anticipated drop of 1.2 MB; whereas today inventories are expected to also follow and decline by 0.9 MB, lower than the previous reading of 2.0 MB according to the EIA.  

As for NYMEX as of 02:13 EST; motor gasoline is trading around $206.140 per gallon falling by $0.51; heating oil is trading around $200.350 per gallon also falling by $0.88; whereas natural gasoline is also trading around $4.546 per 1000 cubic feet dropping by $0.04. In London, Brent futures slid by $0.37 to record $75.160.