Oil Drops Below $100 Pending US Stocks Report

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Oil Drops Below $100 Pending US Stocks Report

The price of oil per barrel declined to about $99 on Wednesday to stretch its losses to the second straight day, as traders waited on a US crude stockpiles report.

Crude for May delivery dropped to $99.08 a barrel, having lost 66 cents on the New York Mercantile Exchange.

Brent crude, which is gauge of prices for global varieties stood at $104.28 per barrel on the London’s ICE exchange after having lost $1.34.

NYMEX oil dropped 0.07% or 7 cents to trade at $99.82 per barrel within early hours of trading in Europe.

According to ABC, the US economy has shown fresh signs of recovery, such as a US Commerce Department Report that indicated growth of construction spending, despite reports showing weak factory output in China, which could hurt the demand of oil.

Yet, the report on US crude inventories from the Energy Department is expected to show a rather mute demand.

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A survey of analysts commissioned by Platts, a unit of McGraw-Hill Cos, forecast a surge of crude oil stocks by 1.8 million barrels. According to figures from the week that ended March 28, up to 2 million barrels of gasoline would be drawn from inventories.

Stocks for crude oil have increased for 10 straight weeks, with over 32 million barrels having been pumped in between the middle of January and March 21.

As NASDAQ reports, the American Petroleum Institute released a report after close of markets on Tuesday, which said US crude stockpiles increased by 5.8 million barrels in the week that ended March 28. The industry group had expected the inventories to add up to 5.3 million barrels. Gasoline stockpiles lost 18,000 barrels as per the report.

Today, gasoline for wholesale declined to $2.8346 per gallon after losing 3.51 cents.

Heating oil suffered a loss of 2.64 cents to trade at $2.8614 for every gallon.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com