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Oil Soars Before and After Inventories Reports

July 10, 2013 at 14:59 by Andriy Moraru

Oil prices rallied to new yearly high level today, following the release of the crude oil report in the United States. Although the commodity was on a gaining side before the report too, it spiked even higher immediately after the release.

Crude oil is currently rallying in a strong bullish wave, which has started back on June 24. Today is the second rising day in a row for this energy commodity. The main reason for the rally is the continued decrease in the oil and gasoline inventories. Although investors have expected a drop in the inventories, following last week’s decline of more than 10.3 million barrels, the median forecast for today’s value was not even near the reported 9.9 million decrease. Total motor gasoline inventories went down by 2.6 million barrels last week compared to 1 million growth forecast.

The weekly inventories numbers reported by the US Department of Energy are valued by the speculators and investors for they often set clear direction of the supply/demand trend in the market. It looks like the oil is experiencing a sudden upward shift in demand, driving the prices up and up.

The spot price for the Light Sweet grade of crude oil jumped up from $104.30 to $105.66 per barrel as of 14:56 GMT today. The daily high was set at $105.96 per barrel earlier — it is the new record high since May 2, 2012.

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