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Crude Goes Down on Increasing Supply & Waning Demand

June 24, 2011 at 3:48 by Vladimir Vyun

Crude dropped after the International Energy Agency announced that it’s going to release the strategic reserves and on the speculation that demand from the US, the biggest user, will decline. The agency stated that it” release 2 million barrels per day for 30 days, starting next week. The prospect of increasing output from Saudi Arabia also contributed to the decline of crude.

The signs of slower economic growth in the US suggest about potential decline of demand for fuel. The jobless claims rose from 326,000 to 319,000 last week. The Federal Reserve decreased its growth forecast for this year to 2.7—2.9 percent this year, compared to April’s forecasts of 3.1—3.3 percent growth.

August contract for crude oil delivery fell by $4.30 to $91.11 per barrel in electronic trading on NYMEX. August Brent crude slipped $4.40 (3.9 percent) to $109.81 per barrel on ICE.

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