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Crude Oil Drops on US Inventories & Europe’s Debt Problems

May 30, 2012 at 19:30 by Vladimir Vyun

Crude oil tumbled today to the lowest level this year on speculations that US inventories swelled. Analysts estimated, ahead of tomorrow’s report from the Energy Department, that US stockpiles of crude rose 1 million barrels to 383.5 million last week, the highest level since 1990. Growing supply of oil coupled with falling demand for fuel, caused by the global economic slowdown, put significant pressure on oil prices. The intention of Saudi Arabia to push the price for Brent to $100 level is another negative factor for oil.

Overall market conditions were not good for commodities, adding to the downside momentum of crude. Tensions grow as time for the Greek elections nears. Spain and its failing banking system do not help sentiment of traders at all. The Standard & Poor’s GSCI Index, which tracks 24 raw materials, dropped 2.6 percent, reaching the lowest level since October 7.

July futures for delivery of crude oil slid as much as $2.94 to $87.82 per barrel on NYMEX today, the lowest price since October 21. Brent tumbled from $106.77 to $103.21 per barrel as of 19:23 GMT on ICE today, touching $102.97 intraday, the lowest level since December 19.

If you have any questions and comments on the commodities today, use the form below to reply.

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