Crude oil prices gained yesterday on the back of a planned strike at Chevron Corp.'s Nigerian unit. Nigeria begin the world's 8th'largest producer and Africa's number one supplier of crude, therefore the tensions in the country moves the market prices as it adds to supply worries. Any strike may slow down production from Nigeria by about 350,000 barrels a day. The contract gained $0.36 as it closed at $136.74 while recording a high of $137.46 per barrel and a low of $131.55 per barrel.
After a volatile week today finally prices remain steady but still above the $136 per barrel. The massive surge and slip in prices are showing investors are confused as they try to figure out the trend of the crude and they do not know whether to focus on the vigorous greenback or the supply and demand factors. Today the markets opened at $136.97 while recording a high of $136.97 per barrel and a low of $136.36 per barrel.
Wednesday, the EIA report was released showing that the U.S. commercial crude oil inventories decreased by 4.6 million barrels from the previous week. At 302.2 million barrels, U.S. crude oil inventories are at the lower boundary of the average range for this time of year. Total motor gasoline inventories increased by 1.0 million barrels last week, and are in the lower half of the average range. Finished gasoline inventories remained unchanged last week while gasoline blending components inventories increased during this same time. Distillate fuel inventories increased by 2.3 million barrels, and are in the lower half of the average range for this time of year.
The outlook remains blurry as there are tensions in Nigeria which may pressure prices higher along with OPEC deciding they will not be pumping more crude in the oil markets as they believe there is already enough supply, are all factors that will keep prices high. On the other hand the strong greenback is attracting investors away from the crude oil markets.