Wednesday, 9 Dec 2009

Crude Drops Bellow $71 on Government Data

Crude oil prices were trading lower today after the release of the EIA Crude Oil Inventories report. The larger than expected decline in crude oil stocks proved to be better than its economic forecast, however, it was not enough to support a rise in the price of crude. The price of oil has dropped the previous six consecutive trading sessions. This correction has shown little signs of weakening.

The EIA reported a larger than expected drop of 3.8 million barrels of crude oil for the previous week. The report also showed a rise in gasoline inventories of 2.2 million barrels. The conflicting information did not bode well for the price. Neither did the resurgence of a strengthening dollar. During the New York trading session, crude oil touched on a low of $70.10. This was down from an opening daily price of $72.95. Crude oil is down for the sixth consecutive trading session for a price decline of 12.1%. The stronger dollar may keep crude prices deflated, making the $80 mark seem difficult to reach given the lack of positive fundamental data.