Crude Oil Declines on U.S. Fuel Inventory Gain
Posted on 05. Feb, 2009 by admin in Crude Oil
Crude Oil prices settled near $40 a barrel on Wednesday, down slightly after the U.S. stock market fell and a government report showed U.S. oil inventories jumped more than twice the amount previously forecast. Fuel demand during the past four weeks averaged 19.5 million barrels a day, down 2.8% from a year earlier, the Department of Energy report showed. Crude prices dropped after U.S. equities retreated as disappointing earnings at Kraft Foods Inc. and Walt Disney Co. triggered a sell off in consumer shares.
Recently, Crude Oil prices have been firming up because of output constraint by the Organization of Petroleum Exporting Countries (OPEC), and perhaps a further cut by the cartel may not be necessary. Crude Oil has plummeted by more than $100 since hitting a record near $150 a barrel in July last year as the global recession has weighed on demand for fuel. OPEC, worried that the global economic downturn is reducing oil demand and pressuring prices, has promised to reduce oil production by a total of 4.2 million barrels per day from levels seen in September. OPEC’s president said on Tuesday the cartel could remove more oil from the market if needed in order to boost prices.
