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Oil Goes Down on Europe & US Stockpiles

January 5, 2012 at 21:18 by Vladimir Vyun

Crude oil dropped today as US inventories unexpectedly increased and worries about Europe’s future intensified. Positive macroeconomic reports from the United States could bolster oil, but in practice haven’t been able to do so.

US stockpiles of crude rose by 2.2 million barrels to 329.7 million barrels last week. Forecasters predicted a drop by 1.4 million. The increase followed growth by 3.9 million in a week before.

Europe’s borrowing costs surged and concerns grew about European indebted economies, especially Greece. That’s bad for oil as the European Union consume 16 percent of global supply. The dollar advanced on the fears, adding further pressure on commodities priced in the US currency.

February futures for delivery of crude oil retreated $1.41 (1.4 percent) to $101.81 per barrel on NYMEX. Prices were up 28 percent in the last quarter. Brent went down from $113.65 to $112.44 per barrel as of 21:12 GMT on ICE today. Earlier, prices touched $114.64, the highest settlement since November 14.

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