Commodity Daily News

Crude Oil Prices Drop as US Inventories Pile Up

Oil prices dropped sharply yesterday with the New York Mercantile Exchange session closing just below the $98 price mark. US oil stockpiles rose over 3 million barrels for the second week in a row, marking a significant uptick in American hoarding behavior. The possibility exists that this is a tactic to release excess stockpiles at the start of the American summer in order to push down on gas prices ahead of the driving season. Whether it will pay off is yet to be seen.

The value of the US dollar versus the euro in recent trading has pushed towards a three-week high near 1.4200, but oil prices continued to rebound until yesterday afternoon as traders price in an expected boost in consumption as the driving season kicks into high gear in the Northern Hemisphere. With yesterday's sharp downtick during the later sessions, and this morning's continuation of that movement, traders appear likely to see oil reaching a bit lower as this week comes to an end - though a return to riskier assets could lift oil prices one more time if the market deems it worthy.