The global slowdown has finally hit the crude oil market as there is crippled demand for gasoline causing prices to dip. The department's Energy Information Administration said demand for gasoline dropped by 1.4% over the last month due to the soaring of gasoline prices.
Also as the dollar gained grounds against major currencies, investors locked in on profits as they once hedged against the falling dollar and inflation while it was cheaper for foreign investors as they once held a stronger currency. The contract shed $2.01 as it closed at $122.30 while recording a high of $125.10 per barrel and a low of $121.84 per barrel.
Today prices extend their plunge based on more than projected supplies of gasoline and diesel fuels while India and Malaysia hiked their fuel prices today as Indonesia and Taiwan may cut back Asian demand for oil consumption as their demand cripples due to the global slowdown. More investors return to equities as the dollar appreciated as they walk away from the crude oil markets. The markets today opened at $122.23 while recording a high of $122.39 per barrel and a low of $121.61 per barrel so far.
The EIA report came out yesterday showing that the U.S. commercial crude oil inventories declined by 4.8 million barrels from the previous week. At 306.8 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 increased by 2.9 million barrels last week, and are in the lower half of the average range. Both finished gasoline inventories and gasoline lending components inventories increased last week. Distillate fuel inventories increased by 2.3 million barrels, and are in the lower half of the average range for this time of year.