Crude oil prices yesterday slipped after the Energy Department report confused the economy by giving investors a mixed picture of the US petroleum reserves. The report showed that US supplies of distillate fuels which include heating oil and diesel increased more than the projected which helped lower prices. If demand continues to dampen for gasoline due to the soaring of prices, prices will continue to fall. The contract shed $1.58 as it closed at $124.22 while recording a high of $126.04 per barrel and a low of $123.77 per barrel.
Today, crude oil prices continue its bearish wave as prices resume their fall. The markets wait as President Bush is scheduled to go to Saudi Arabia this Friday to convince them to pump more oil into the market. Hopefully, if Mr. Bush is successful in his meeting, prices will continue their dip as the market rest assured that there is sufficient supply in the economy.
Also in news that the government is going to halt shipments to the US emergency oil reserve as they believe this should lower the current prices of crude in the biggest energy consumer, the US. The market today opened at $123.83 while recording a high of $124.58 per barrel and a low of $123.54 per barrel.
The EIA report was released yesterday showing that the U.S. commercial crude oil inventories increased by 200 thousand barrels from the previous week. At 325.8 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year. Total motor gasoline inventories declined by 1.7 million barrels last week, and are in the middle of the average range. Finished gasoline inventories fell last week while gasoline blending components inventories increased during this same time. Distillate fuel inventories increased by 1.4 million barrels and are in the lower half of the average range for this time of year.
The markets are currently very volatile as supply and demand factors still control the market. Gladly the fall of energy prices eased inflationary pressure in the US as it offset the rise of food prices, giving the Feds even more room to concentrate on vitalizing growth in the economy.