Commodity Daily News

Falling Fuel Consumption Adds to Depreciating Oil Prices.

Oil prices slightly dropped below $118 a barrel yesterday, $30 below their record high as traders weighed a second weekly fall in gasoline supplies against an unexpected climb in U.S. Crude Oil Inventories - the first in 3 weeks. Fed also contributed to the latest drop in Oil prices, expressing beliefs that high energy prices are eating into demand. Light Crude for September delivery finished yesterday's session down 59 cents at $118.58 a barrel on the New York Mercantile Exchange.

As fuel consumption in the U.S is consistently lowering as opposed to the same time at the previous year, expressing weak demands, the USD is finally showing signs of strengthening, giving traders less and less motives to invest in Oil.
Oil market traders are paying close attention to see if whether the Crude will fall below $117, a key resistance level expected to trigger a rash of technical selling by computers programmed to dump oil contracts once prices fall below a certain threshold.