| News | Crude oil slumps after unexpected rise in inventories |
| Previous | |
| Forecast | |
| Analysis | The market volatility continues to be high and crude was affected by the prevailing mixed sentiment ahead of the EU summit and was further dragged south to trade briefly below $100 a barrel before the rebound on the unexpected buildup in crude inventories. Crude oil futures for January settlement turned lower again after early gains which took the contract to as high as $101.28 per barrel and currently hovering down by nearly 1.0% around $100.33 a barrel recovering from the low of $99.67 hit after the EIA reported an unexpected buildup in crude inventories in the United States. Crude started to soften on renewed fears over Europe ahead of the crucial summit, and the fears extended after Germany denied the report that said the EU is considering combining the EFSF with the ESM to expand the firepower to contain the crisis which again sent the market lower as the clock ticks closer to the final decision. The downside pressure extended with the start of the U.S. session and as equities surrendered the gains and Wall Street opened in the red alongside the downbeat report from the EIA. The EIA reported a rise in commercial crude oil inventories by 1.3 million barrels from the previous week and much worse than the expected drop of 1.3 MB. At 336.1 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 5.1 million barrels last week and Distillate fuel inventories increased by 2.5 million barrels last week. With the evident jitters in the market ahead of the summit and the unexpected pileup in inventories crude surrendered to the downside pressure offsetting any upside support from the Iranian tension which slightly eased as the EU is still not final on the decision to ban Iranian oil imports which will have its effect on the market and surely more in EU nations themselves as they import around 450 thousand barrels a day from Iran. We still expect the volatility to continue with the uncertainty over Europe and the geopolitical tension that is still offering upside support and prevent crude from surrendering to the weakening global demand outlook till now. |
To ensure you receive such e-mails in the future, please add ecPulse.com to your list of approved senders.
No comments:
Post a Comment