Current Oil Prices Rise with Falling Supplies
Oil prices today increased to $85 per barrel following a report showing that the crude supplies of the United States dropped for the second week, indicating that there is improvement in demand.
In NYMEX electronic trading, benchmark oil for delivery in August rose by $1.36 to reach $85.27 per barrel in New York. At the end of the day, crude oil prices per barrel fell by $2.08 to finish at $83.91.
In London’s ICE Futures exchange, Brent crude for delivery in August rose by $1.21 for a per barrel price of $99.18.
According to the American Petroleum Institute, crude supplies declined by 700,000 barrels in the past week, which includes a drop of 900,000 barrels at Cushing, Oklahoma’s main oil storage facilities. A similar drop of 700,000 was seen in distillates and gasoline inventories that had increased by 2.5 million barrels in the last week, added the API.
Frankfurt’s Commerzbank analysts said that the current oil price rise is unlikely to go on. Weakening demand together with high supply still indicates a sufficiently supplied crude market.
Several experts recently said that the high oil prices today are the result of a drop in the past few sessions due to the recent decision of the Norwegian government to end the oil workers’ strike that could have possibly led to crucial output reductions.
According to London’s Sucden Financial energy market report, crude oil prices today are getting a slight rebound which is considered to be corrective in nature.
The crude oil price per barrel has fallen from May’s $106 in the midst of indications of a weakening world economy. Investors are more likely to keep on reacting to economic indicators, especially on China’s recent data on GDP and industrial production, said Rittersbusch and Associates.
Wide upside and downside price changes, however, are anticipated during the week, said Ritterbusch. The data from China can greatly determine the condition of the energy market at the end of the week.
Elsewhere in the energy markets, the price of heating oil increased by 2.97 cents to a per gallon price of $2.7492. Gasoline futures declined by 0.44 cent to a per gallon price of $2.7425. Natural gas rose by 0.5 cent for a price of $2.742 for every 1,000 cubic feet.