Current Crude Oil Price Continues to Drop for Sixth Straight Day
Another drop occurred in the current crude oil price for the sixth consecutive day as the government of the United States reported the highest supply of crude in 22 years.
In New York, Benchmark U.S. oil (called West Texas Intermediate or WTI) fell by 20 cents to end at $96.81 a barrel. The drop for six straight days hasn’t been seen in this country since July of 2011.
The decrease in the crude oil prices is a reaction to recent doubts about the ability of Europe to mend its ongoing debt crisis and the disappointing employment numbers in the United States. And with the weakening of the various economies, oil demand slows down, which consequently leads to an increase in crude storage.
The Energy Information Administration recently said that high oil imports and low petroleum domestic demand aided in strengthening the oil supply of the country during the past week to its highest amount since 1990 of 379.5 million barrels.
Moreover, The Commerce Department said that the wholesalers in the United States raised their inventories slowly in the month of March, which caused factories’ slowdown in the country.
Saudi Arabia is also increasing supplies as a way to push down global crude prices. In addition, Iran is set to convene with other nations in the coming weeks, including the United States, to discuss its nuclear program. That meeting has relieved worries of a long standoff that can slow down shipments of oil from the Middle East.
At gas stations, consumer gasoline prices dropped by over a cent to reach $3.75 a gallon nationwide, said the Wright Express, AAA and Oil Price Information Service (OPIS). The gasoline price of one gallon has decreased to an average of 19 cents in around one month. Gasoline prices are cheaper by 21 cents compared to its rate during the same period last year.
According to Tom Kloza, oil department head of OPIS, gasoline prices must gradually lower in the summer. He sees the nationwide average decline to a low rate of $3.50 a gallon by July 4.
Heating oil prices increased by almost a penny to end at $2.991 a gallon. Wholesale gasoline prices grew by 2.97 cents to close at $3.0241 a gallon. In natural gas markets, a 7.2 cent was realized, bringing the price to $2.465 for every 1,000 cubic feet.
In London, Brent crude, the basis of current crude oil prices imported into the United States, increased by 47 cents to end at $113.20 per barrel.