NewsThe EIA Report
Previous1.1 Million Barrels
Forecast-1.3 Million Barrels
AnalysisCrude fell for the second consecutive day today trading below $88 per barrel, as traders’ lock in profits following black gold recording its first rise above $90 for the first time in two years, while Europe’s debt woes keep feeding the wave of jitters throughout markets, which coupled with fears over Chinese monetary tightening all benefiting the dollar and weighing on commodities. 

Crude today hovers around $88 per barrel recording its highest around $88.66 and lowest around $87.60, while it currently is trading around $87.96 per barrel.

The drop in futures was due to pessimistic data from Europe as officials rejected immediate aid for Portugal and Spain, while the IMF director Dominique Strauss-Kahn yesterday stated that the European continent’s dire economic situation requires a quick response from its institutions to curtail the spreading debt crisis in the region.

Crude yesterday traded around $89 per barrel recording its highest around $90.73 and lowest around $88.08 per barrel, closing around $88.23 per barrel. Crude climbed yesterday after the US administration extend Bush-era’s tax cuts which supported growth prospects, alongside the cold weather sweeping Europe and US and thereby pushing demand on crude.

Moreover, the API yesterday reported a drop in stockpiles by 7.34 MB to 349.3 MB last week; distillates including heating rose 1.7 MB to 159.3 million. Meanwhile, the Energy Department is to release its EIA report later on today and is expected to show a drop by 900 thousand barrels, while gasoline stockpiles are expected to show a 300 thousand barrel drop as well.

On the other hand, China is further dampening demand on oil due to fears that it may be raising interest rates, which today weighed negatively on the sentiment in Asia pushing equities and commodities lower. 

As for NYMEX as of 03:46 EST; motor gasoline fell $1.01 recording $229.950 per gallon; heating is trading around $245.750 per gallon declining $0.51; whereas natural gasoline rose $0.27 to record $4.405. In London, Brent futures shed $0.61 to record $90.830.