Crude prices fell after the government report came out showing that the nation's crude inventory rose more than projected last week. Investors believed that sooner or later with the falling demand and the rise of supply prices of crude will eventually start to decline. Those past couple of days more traders were attracted to the oil market as there was a depreciated dollar, and considered it a hedge against inflation, therefore this was one of the reasons for the strong bullish wave in crude.
Since investors had their own point of view on how oil was going to act, left oil prices fluctuating. Crude is known to be a hedge against the depreciating dollar, and since oil is bought and sold in dollars, it is much cheaper for foreign investors to invest in. Yesterday, oil lost $1.47 reaching a high of $100.33 per barrel and a low of $96.87 per barrel closing the session at $98.23.
Today, oil prices continue to decline as the EIA report eased everyone's fears of having insufficient supply in the US. Seeing that the economy is also heading towards a global slowdown will lead to dampened demand of crude, especially having the U.S. showing positive signs of recession. As there is decreased demand of crude in the U.S. will result in a decline of oil prices since the U.S. is the world's largest crude consumer. The contract today opened at $97.50 to attain a high of $98.15 per barrel and a low of $97.16 per barrel.
The EIA report came out yesterday showing that the U.S. commercial crude oil inventories rose by 4.2 million barrels compared to the previous week. At 305.3 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year. Total motor gasoline inventories increased by 1.1 million barrels last week, and are above the upper limit of the average range. Both finished gasoline inventories and gasoline blending components inventories increased last week. Distillate fuel inventories decreased by 4.5 million barrels, and are in the lower half of the average range for this time of year.