The market sentiment has altered as the US economy feels that the worst has come while people start believing that there will not be any further interest rate cuts by the Feds. Investors are starting to gain confidence in greenback as it gains momentum against major currencies while causing dollar backed commodities to plunge. Crude contracts shed $0.94 as it closed at $112.52 while recording a high of $115.23 per barrel and a low of $110.30 per barrel.
Today crude oil continues its dip for the fourth day in a row as the US dollar remains strong. Also supporting the decline is the end of the strike in Nigeria, as employees start going back to work.
Inflation pressures start to ease as crude oil steadily declines as more and more investors continue to flee crude oil markets as they are losing interest since once they entered the market as hedge against inflation and the weak dollar. Markets opened at $112.25 while recording a high of $112.32 per barrel and a low of $111.84 per barrel.
Wednesday's EIA report showed that the U.S. commercial crude oil inventories increased by 3.8 million barrels from the previous week. At 319.9 million barrels, U.S. crude oil inventories are in the lower half of the average range for this time of year. Total motor gasoline inventories decreased by 1.5 million barrels last week, and are in the upper half of the average range. Finished gasoline inventories rose last week while gasoline blending components inventories declined during this same time. Distillate fuel inventories increased by 1.1 million barrels, and are in the lower half of the average range for this time of year.
Now all the focus is on the US dollar as traders wait later this afternoon for the release of the non-farm payrolls in which it well determine what trend the greenback will take. If the dollar appreciates, then crude prices will continue the bearish wave, but if the USD deteriorates investors will once again be interested in the crude market while bringing prices up to record all time highs as was witnessed last week.