Crude Oil Traders React To An Unbalanced Inventory Report

Crude Oil Traders React To An Unbalanced Inventory Report
Crude Oil Traders React To An Unbalanced Inventory Report

Crude oil traders seem very confused after the EIA inventory release on Wednesday. Crude oil fell to trade at 92.34 after the data release. The commodity recovered this morning adding 34 cents to trade at 92.68 well below its expected and recent range in the upper 95 price range. Tuesday after the American Petroleum Institute’s release showed a significant drop in crude oil inventory oil prices climbed above 94.00. This drop was supported by the EIA inventory but a significant increase in gasoline stocks offset the drop in oil. Oil, prices in the US slumped for the sixth session in the last seven after the stocks for gasoline and distillate increased nearly twice as much as markets had been anticipating, as per a Bloomberg survey showed. The US Department of Energy said, gasoline inventories jumped up 6.24 million barrels for the week ended Jan 3 whereas the distillate supplies which are more closely watched due to the anticipated winter demand in the US advanced by 5.83 million barrels. As product stocks rose, overall demand for these products as against the markets supply was lower by nearly 4% last week, hitting its lowest level in around seven months, the report showed.

A stronger dollar internationally also weighed the crude prices. Libya’s Oil minister said that, Libya will take to court any foreign firms trying to buy oil from eastern ports seized by armed protesters and stop doing business with them. The first crude has started to flow through Iraqi Kurdistan’s new pipeline across Turkey and the first independent exports are expected to begin at the end of this month. Brent oil is trading at 107.52 up by 6 cents this morning. Crude oil prices are expected to remain in a range for the day as investors would be keen to wait US nonfarm payroll data coming tomorrow.

Gasoline prices are holding at 2.6649 down after the surprising climb in inventory. Heating oil is trading flat as the record cold temperatures continue across the US. Heating oil is at 2.9571. Natural gas traders are looking forward to today EIA natural gas inventory as traders hope that the record cold in the US increased residential demand. Natural gas is trading at 4.186 after taking a major tumble on Wednesday dropping 4.3 after the cold storm eased. U.S. natural gas futures were down on Wednesday as forecasts for warmer weather countered expectations for strong draw downs in storage. Private forecaster MDA called for a warm surge over the next one to five days The US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to decline by 147 billion cubic feet (bcf) for the week ending on 3rd January 2014

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