Gasoline Stock Slump and Crude Oil Prices Edge Higher
Crude oil prices edged downwards due to light profit taking in the markets recently, however it did end up over the week, as supply disruptions from the MENA region as well as the ongoing situation in Japan forced prices upwards.
Clashes in Syria, Yemen, Saudi Arabia and Bahrain kept worries about unrest & the consequent threat to crude oil supply in focus, as speculators braced for a longer term disruption of supply from Libya. In the online CFD markets, crude oil prices gained recently, but it stopped short of 2011 highs, failing to break the March 7th highs of $106.95.
Japan said in a recent announcement it would release crude oil from its strategic inventories. The releases might help ease supply worries following the huge earthquake & tsunami which forced the shutdown of nuclear reactors & translated into power outages.
However Japan’s crisis could possibly also prove optimistic for crude oil. The outages ought to lead the world’s third largest crude consumer to increase oil fired power generation, increasing demand.
Also in the financial markets, stocks of American gasoline recorded their biggest ever seasonal slump as crude oil companies trimmed stocks of winter grade gasoline in order to make room for cleaner burning summer blends. American gasoline demand increased, weekly figures from the EIA revealed in a recent statement.
Gasoline equities dropped a more-than-expected 5.32m barrels to 219.72m barrels, in the week up to March 18th, against market estimates for a 1.8m barrel-draw. Stocks of motor fuel have fallen 15m barrels over the first 3 weeks of March, which is largest fall for such a period on record (Energy Information Administration began measuring and reporting weekly stocks in1990).
Energy Information Administration numbers also revealed US light sweet crude oil stocks increased by more than analysts had expected recently. Shares increased by 2.13m barrels to 352.77m barrels, in comparison to estimates of a 1.6m barrel increase. Stocks of distillate increased a small 7,000 barrels up to 152.62m barrels, in comparison to market analyst estimates of a 1.3m barrel-draw.
CFD trading and financial spread trading come with high levels of risk to your trading capital, investment formats such as these are leveraged which means that you can lose more than your initial investment.
When trading you should only trade with money you can afford to lose; always make sure you understand the risk involved when investing with these products which might not be suitable for your trading requirements. Obtain impartial financial guidance when appropriate.
This entry was posted on Thursday, March 31st, 2011 at 3:41 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.