Commodity Daily News

Will Crude Oil Continue Its Freefall?

Oil prices slid once again yesterday after a positive U.S. government inventory reports and a rise in the USD vs. the EUR. Crude oil was down $3.98 a barrel to $124.44 in trading on the New York Mercantile Exchange. That follows a drop of $3.09 on Tuesday.
The price slid after the U.S. government reported that Crude supplies fell less than expected in the week ended July 18, and that there was more gasoline in stockpiles than had been expected. Concern that Hurricane Dolly might damage U.S. production in the Gulf of Mexico dwindled as the storm neared the Texas/Mexico border. None of the computer models used to predict storm tracks indicated it would steer toward the Gulf of Mexico, home to about a quarter of U.S. oil production.
Crude oil also dropped after reports showed demand in the U.S. and Japan, two of the three largest oil consuming countries, fell as high prices crimp fuel consumption. Because oil is priced in US dollars, its price falls as the greenback gains against other currencies.