Commodity Daily News

Oil Soars above $72 a Barrel

Crude Oil rose to a 7-month high after a government report showed that U.S. crude supplies unexpectedly fell. Stockpiles of oil dropped 4.38 million barrels to 361.6 million in the week ended June 5, the Energy Department said Wednesday. Crude Oil for July delivery rose to another record price this morning by reaching $72.04 a barrel.

Oil demand is still pretty weak across the globe despite a slight increase in demand in the U.S. Commodity futures which have increased this year as the Dollar weakened and equity markets rebounded. Still, the fundamentals don't support prices at these levels and Oil's current strength might be a result of momentum-trading as investors turn to higher yielding assets amid rising confidence of global recovery. Fears over rising inflation may also assist in Crude Oil's rise as investors look for assets that can offer protection against rising inflation.