|Previous||4.2 million barrels|
|Forecast||1.7 million barrels|
|Analysis||Crude oil fell from near its highest levels in four days as the EIA report will be released today and its expected to show growing crude stockpiles in addition to the downgrade of Japan’s credit rating by Moody’s, and fears of a decline in the economic performance would falter the demand on oil, all are reasons for the crude to fall.|
Light sweet crude oil for October opened today at $85.84 a barrel recording the intraday high at $85.86 a barrel and a low of $84.54 a barrel and is currently trading around $85.15 a barrel.
The USDIX which measures the performance of the green currency against other six major currencies, is trading within a narrow range after it fell to the low of 73.78 from the opening 73.82 recording the highest at 74.04 and is currently trading around 73.83.
Moody’s rating service downgraded the Japanese Sovereign Debt to Aa3 after the deficit rose in Japan, while the governmental debt reached the highest since 2009, which will prevent the government from adopting more stimulus packages. However Moody's did not change Japan's outlook, which continues to be stable, indicating the company has no intention to downgrade the Japanese economy once again.
In the United State, there are speculations that the Feds will announce further steps to revive the U.S. economy. Also a report may show that the U.S. economy grew less during the second quarter than the previous estimate. The Fed and other central banks will meet this week in Jackson Hole.
As for the developments on Libyan oil, it would resume production soon and but it may take years to return to usual level before the pre-unrest rate of 1.5 million barrels a day. Especially since the Libyan production declined 100 thousand barrels per day during the previous month, and as one of the major countries of the OPEC it is necessary to return to normal production rates.
The American Petroleum Institute said yesterday that U.S. crude supplies fell 3.34 million barrels to 347 million last week; Gasoline inventories increased 6.37 million barrels to 213.9 million last week, according to API data yesterday.
The Energy Department report may show stockpiles rose 1.75 million barrels from 354 million in the seven days ended Aug. 19, and it also may show that gasoline inventories decreased 1 million barrels from 210 million.