Commodity Daily News

Crude Oil Rises on Improved Demand

Crude Oil for July delivery rose 48 cents to end trading at $71.51 a barrel on Wednesday. In a volatile trading day, Crude closed higher after a mixed Energy Department report showed a bigger than expected drop in Crude supplies, and an increase in gasoline demand along with higher than expected rise in inventories. Signs of improving Oil demand offset the negative side of the report. Options expiration also played a role in the rally as July options expired Wednesday.

Crude's rally over the past several months was supported by a weakening Dollar, and fears of inflation that pushed investors to buy commodities as a hedge. However, concerns of inflation in the near future subsided as the U.S. CPI (Consumer Price Index) increased by only 0.1%. As Crude inventories remain at very high levels, and the USD is showing signs of stability, another rally for Oil may be unlikely in the short-term.