Oil Stands Still, Stockpile Declines Prevent Further Selloff
Jul 10th, 2008 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market Wednesday, crude for August delivery was virtually unchanged after the big two-day blowoff, closing at $136.05, up a penny. July reformulated gasoline added 1.7 cents, to $3.38/gallon.
In its weekly inventory report, the Energy Information Administration said that crude stocks fell 5.9 million barrels in the week ended July 4. That surely supplied oil some support, as analysts were looking for a drop of only 1.9 million barrels.
But that the support was so thin indicates “traders are still willing to sell if inventories haven’t dropped so dramatically,” said James Williams, of WTRG Economics. With oil consumption projected to fall off this year, “folks have started realizing the economic impact” on demand, Williams added.
In addition, “The [crude stock] decline was mostly in PADD 5, so the market reaction was muted,” said Nauman Barakat, of Macquarie Futures USA in New York. PADD 5, or West Coast stockpiles, made up 80% of the shortfall. “The West Coast is detached from the rest of the country so any impact is mitigated,” Barakat added.
The EIA also said gasoline supplies rose by 900,000 barrels, and distillates were up by 1.8 million barrels, both in line with expectations. Refineries operated at 89.2% of capacity, unchanged from the week before.
Source: Oil Stands Still, Stockpile Declines Prevent Further Selloff
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