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Crude Oil Falls as Growth of Supplies Outpaces Demand

August 18, 2010 at 23:18 by Vladimir Vyun

Crude oil fell today as reports showed that US oil and motor gasoline inventories declined less then expected, while US stockpiles of petroleum and distillate fuel increased. US crude oil inventories decreased by 0.8 million barrels from the previous week to 354.2 million barrels, while a decrease by 1.1 million was expected. Gasoline inventories fell 39,000 barrels to 223.3 million, compared to a predicted drop by 375,000. Stockpiles of distillate fuel went up 1.07 million barrels to 174.2 million and petroleum inventories increased by 5.3 million barrels last week.

Analysts say that demand remained strong and even grows, it’s just that growth of supplies outpaced demand. Total US fuel consumption grew 0.4 percent to 19.6 million barrels per day in the last month, while gasoline demand rose 6,000 barrels per day at the same time to 9.45 million, the highest level since August 2008. Reports showed a mixed picture, where balance of supply and demand may easily shift, so oil prices may move in any direction in the future. Prices advance can be limited, though, by concerns for the global economic recovery.

September delivery for crude oil slipped $0.35 (0.5 percent) to $75.42 per barrel on NYMEX. Futures reached $73.83, the lowest price since July 7. Oil prices are still 9 percent higher than at the same period in the previous year.

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