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Oil prices are moving strongly higher today following a government report that showed inventories dropped dramatically last week.Today's report from the Energy Department indicated that oil inventories fell by 8.4 million barrels last week, in stark contrast to the increase of 1.2 million barrels that analysts had been expecting to see for the precious crude.
With last week's declines, inventories are still sitting at 343.6 million barrels, which is hardly a low inventory, but the decline was enough to bring the bulls back into the market, driving oil prices up $3.32 a barrel, to $72.51.
The main reason for the steep decline in inventories was a dramatic drop of imports, which were 15% lower than the previous week, as refiners showed their nervousness over recent rises in stockpiles.
Gasoline inventories also showed a surprising decline during the week. Analysts had been expecting to see gasoline inventories rise by 1.0 million barrels, but the report showed gasoline inventories actually slipped by 2.18 million barrels in the week.
Refineries upped their output last week, the first time in 5 weeks to 84%.
Another factor helping push oil prices higher was a drop in the U.S. dollar yesterday. The dollar fell 0.8% yesterday verse the euro, and is now sitting at $1.4248.
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Reader Comments (Page 1 of 1)
8-19-2009 @ 10:39PM
Iridium said...
The inventories dropped during the huge profit taking sale last week. Remember when oil fell to $63 and then jumped back up to $68 the next day.
The majority of oil inventory is being held by speculators. When they sell a ton of oil it will pull inventories lower. It has nothing to do with supply and demand.
The manipulators knew the huge sale would lower inventories and they could use this as a tool to drive the price up the following week. they make it look like demand has picked up but that is as far from the truth as you can get.
Until we fix this BS game we are going to continue to be bent over the barrel.
Traders, not oil companies hold the majority of contracts and the majority of inventory. This should never been allowed to happen.
8-19-2009 @ 11:08PM
MoeJoe said...
and how do we fix this then?
8-20-2009 @ 11:27AM
JP Morgan's ghost said...
As long as oil is traded on the futures market for dollars Goldman Sachs, JP Morgan Chase etc. will play it up and down without regard to supply and demand. They go by charts on a screen and milk the markets up and down making a fortune. That's why they run the country-they control all the money and Capitalism is just moneyism. Freedom and Democracy are quaint terms for the suckers today. Stole over 24 trillion and most don't even know it.
Gangsters don't run sustainable businesses they fleece them but these boys ARE the system and above the "law". Last July oil hit $147 and four months later it was $32? Supply and demand or the big boys playing it up and down. Goldman Sachs etc. drove it up,shorted it down and bought at the bottom to ride it back up! That's the game.