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Oil approaches $60 per barrel after inventory release
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(AP Photo/Paul Sakuma)
The price of oil is extending losses and shrugging off an upgrade in the IMF's outlook for the global economy after the government's release of inventory data showed a smaller-than-expected decline in oil and builds in gasoline and distillates.
Crude oil in storage fell 2.9 million barrels from the prior week and remains above the upper boundary of the average range for this time of year.
Gasoline increased by 1.9 million barrels and is in the upper half of the range. Distillates, which include diesel and heating oil, jumped by 3.7 million barrels, and like oil, is above the upper boundary of the average range for early July.
What a difference just five days has made in the oil market. Prices had been above $70 per barrel, but a shift in sentiment regarding the economic outlook for the second half of the year has encouraged speculators to exit positions, bringing down the price of crude to nearly $60 per barrel.
Demand remains weak nearly across the board, with only a 1.3% rise in demand for gasoline versus a year ago being revealed in the data released by the Energy Information Administration.
Declines in crude prices as well as wholesale gasoline should eventually begin to show up at the pump and provide a psychological lift to consumers, which may also end up being reflected in consumer confidence surveys.
For more info and a more optimistic tone from Australia: Please see my blog Tomorrow's Economy Today.
If you enjoyed the above above article, please see the latest look at crude oil prices.
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