NewsCrude slightly dips below $75 extending the losses for the fourth dayPreviousForecastAnalysisCrude has dipped below $75 per barrel on low confidence and jittery investors over the outlook for the global recovery and its implications on demand, although yesterday’s EIA report showed better than expected decline in inventory levels in the largest energy consumer in the world. Meanwhile, Hurricane Alex fears subside as the storm was downgraded with no heavy damages.
Crude today is trading around $75 recording its highest around $75.37 and lowest around $74.63 per barrel. Meanwhile, yesterday the black gold traded around $76 recording its highest at $76.80 and lowest around $74.40 per barrel to settle at $75.30 in NY.
The EIA report yesterday showed progress in US inventories, where they dropped by 2.0 MB opposed to the prior week's rise of 2.0 MB; the decline was almost double forecasts of 0.9 MB, inventories reached 363.1 MB still above the medium term average range for this time of year. Motor gasoline recorded a gain by 0.5 MB, whereas distillate fuel also recorded a rise by 2.5 MB both remain above the medium term average range for this time of year.
The S&P GSCI Index closed around 495.18 up by 1.52 points; whereas the RJ/CRB Commodity Index closed around 258.52 up by 2.25 points.
On the other hand, recent developments regarding Hurricane Alex are slightly relieving investors, where the National Hurricane Center said that Alex has made a landfall weakening to category 1 from category 2, and is expected to further weaken as it continues its way inland to northwest Mexico and south-southwest of Texas.
However, oil output continues to suffer, where eight rigs and 74 production platforms have been evacuated causing a 421,000 barrel loss per day which makes up 26% of the Gulf’s production rate. Nonetheless, the negative sentiment in the market and the downbeat Chinese and US data offset the effect of lower supply as investors remain focused on weaker growth outlook.
The DJIA dropped to its lowest level this year and ended down 1% at 9774.02, extending its losses by 10% in the second quarter. Asian Indices today also declined, all affecting the bearishness across commodities.
As for NYMEX as of 01:45 EST; motor gasoline is trading around $204.910 per gallon falling by $0.55; heating is trading around $200.400 per gallon also dropping by $0.51; whereas natural gasoline is also trading around $4.619 per 1000 cubic feet gaining $0.06. In London, Brent futures slid by $0.79 to record $74.420.