Crude Plunges
Mar 12th, 2009 | By Doug Casey | Category: Financial NewsIn the energy market on Tuesday, oil slid for a second straight day, with crude for April delivery plummeting to close at $42.33/barrel, down $3.38. April reformulated gasoline was down 4.6 cents, to $1.2512/gallon.
In its weekly inventory report, the Energy Information Administration said that crude supplies rose by 750,000 barrels for the week ended March 6. That surprised analysts, who had been expecting a decline of about a million barrels.
Gasoline stocks declined by 3 million barrels, more than 2½ times expectations, while distillates rose by 2 million barrels, 10 times as much as projected. Refineries were operating at 82.7% of capacity, down from 85%.
The EIA also reported on falling demand. Total petroleum use over the past four weeks, including gasoline, jet fuel and diesel, averaged 19.3 million barrels a day, down by 2.1% from a year ago.
“On a fundamental basis the oil market remains very bearish,” said James Williams, of WTRG Economics. “With an OPEC meeting scheduled for the 15th, it increases the probability that they will cut [production].”
OPEC President Jose Botelho de Vasconcelos, of Angola, remarked that the cartel “is ready to take the decisions that will result in the stability of the oil market.”
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