| Oil Prices Above $83 Briefly On Inventory Report |
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| Written by Lee Mel |
| Monday, 15 March 2010 19:14 |
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An Inventory report on the level of crude supplies was released by the Energy Information Administration this morning and pushed Crude oil prices to a brief new high for 2010. The Oil price then reversed the rise during the day.
An Inventory report on the level of crude supplies was released by the Energy Information Administration this morning and pushed Crude oil prices to a brief new high for 2010. The Oil price then reversed the rise during the day. The price of crude oil futures for April delivery hit a high of $83.03 early Wednesday, as speculators and traders bought into a 1.4 million barrel increase for a 343 million barrel total inventory level. The Platts survey of analysts found the expectation was for 2.1 million barrels. Being much lower than the projected level of inventory caused an upward spike in Oil prices as the lower than expected number was taken as a sign of higher demand. Analysts pointed out that despite the lower than expected inventory number, crude oil levels are still high for the current oil price. Traders seemingly agreed as after the running up to $82, oil prices dropped back in the later morning of the session to close near Tuesday's price of $81.50. OPEC, the collection of the world's largest oil producing and exporting countries, believes a more stable global economy for the rest of the year should lead to an increase in demand of over 900,000 barrels of crude oil a day. OPEC would prefer that oil prices remain at current levels, or go even higher. However, real data continues to suggest modest demand in oil-based products in the US. Business and consumers are still hesitant to begin traveling and transporting at pre-recession levels. Without significant gains in US oil demand, it is hard to imagine OPEC's forecast would hold true. Several lanalysts are continuing to call the current oil price levels(which are 17 per cent greater over the last month) too high based on supply and demand. Inventory data continues to remain near historical highs and OPEC has decided not to intervene greatly by significantly cutting production to drive oil prices higher. Still a major catalyst for the firmness in oil prices seems to be its strong correlation with US stocks and the general feeling of economic recovery. Investors are bullishly confident that at some point, an improved economy will generate more oil consumption by businesses and consumers. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Visit LiveCharts.Co.Uk for live Oil prices and live spot Gold price. |