WTI Crude Falls below $95 as U.S. Stockpiles Increase

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WTI Crude Falls below $95 as U.S. Stockpiles Increase
WTI Crude Falls below $95 as U.S. Stockpiles Increase

WTI Crude Falls below $95 as U.S. Stockpiles Increase

For the first time since June this year, WTI (West Texas Intermediate) crude fell below $95 a barrel sending alarm to oil companies. This is happening amidst the news that U.S. stockpiles have increased to a great extent. On the other hand the dollar has gained versus the euro as the latter has fallen remarkably.

Earlier, a recent report by the U.S. Energy Information Administration showed that monthly average prices for crude oil continued to increase in August where the average domestic crude oil first purchase price rose $1.52 (1.5 percent), to $103.13 per barrel. Similarly, there was an increase in the average free-on-board cost of imported crude oil as it got a growth of $1.04 which is 1.0 percent increase.

Thus, it reached $102.50 per barrel. There was also an increase in the average landed cost of foreign crude oil which it increased to $1.83 i.e. 1.8 percent and reached $102.86 per barrel.

For the first time since June this year, WTI (West Texas Intermediate) crude fell below $95 a barrel sending alarm to oil companies. This is happening amidst the news that U.S. stockpiles have increased to a great extent. On the other hand the dollar has gained versus the euro as the latter has fallen remarkably.

Earlier, a recent report by the U.S. Energy Information Administration showed that monthly average prices for crude oil continued to increase in August where the average domestic crude oil first purchase price rose $1.52 (1.5 percent), to $103.13 per barrel. Similarly, there was an increase in the average free-on-board cost of imported crude oil as it got a growth of $1.04 which is 1.0 percent increase.

Thus, it reached $102.50 per barrel. There was also an increase in the average landed cost of foreign crude oil which it increased to $1.83 i.e. 1.8 percent and reached $102.86 per barrel.

Declining Crude Prices a Major Concern for Oil Companies

According to some estimates, WTI’s losing streak which probably will extend to next week. Whereas the dollar has increased as much as 0.8 percent to $1.348 against the euro, the demand for raw materials denominated in the U.S. currency has decreased to a great extent.

Nonetheless, there has also been negative growth for the S&P’s GSCI Index of 24 raw materials which fell by 1.7 percent to 611.64. Several market observers believe that on the one hand, the supply side has overtaken everything else, on the other there is plenty of oil around and the market is in breakdown mode.

Falling Euro also a Major Concern

In its worst trading day, the euro lost more than 140 points against the U.S. dollar within 24 hours amidst the news that the economic indicators released on Thursday were quite terrible. Whereas the German retail sales contracted 0.4% in October against the expected growth of 0.5%, the German consumer climate dropped against its previously recorded figure of 7.1.

It is expected that the ECB may cut rates next week as the region’s inflation fell to the least since November 2009. For several investors and traders the falling euro is breaking the backs of demand for commodities including crude oil. Whereas futures capped a fourth straight weekly decline, a U.S. government report released recently shows that supplies advanced a sixth week.

According to some estimates, WTI’s losing streak which probably will extend to next week. Whereas the dollar has increased as much as 0.8 percent to $1.348 against the euro, the demand for raw materials denominated in the U.S. currency has decreased to a great extent.

Nonetheless, there has also been negative growth for the S&P’s GSCI Index of 24 raw materials which fell by 1.7 percent to 611.64. Several market observers believe that on the one hand, the supply side has overtaken everything else, on the other there is plenty of oil around and the market is in breakdown mode.

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Falling Euro also a Major Concern

In its worst trading day, the euro lost more than 140 points against the U.S. dollar within 24 hours amidst the news that the economic indicators released on Thursday were quite terrible. Whereas the German retail sales contracted 0.4% in October against the expected growth of 0.5%, the German consumer climate dropped against its previously recorded figure of 7.1.

It is expected that the ECB may cut rates next week as the region’s inflation fell to the least since November 2009. For several investors and traders the falling euro is breaking the backs of demand for commodities including crude oil. Whereas futures capped a fourth straight weekly decline, a U.S. government report released recently shows that supplies advanced a sixth week.

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