EIA Reports Increase of 900,000 Barrels in Oil Inventories

Energy Information Administration released its inventories report on Wednesday according to which crude oil stockpiles increased by 900,000 barrels for the week ending May 18th, 2012 while analysts forecasted the increase of 750,000 barrels for the respective week. Another trade group, the American Petroleum Institute reported the increase of 1.5 million barrels in crude oil inventories on Tuesday.

Gasoline inventories declined by 3.3 million barrels as compared to analysts expected decrease of 200,000 barrels. Distillates supplies which include diesel and heating oil fell 300,000 barrels while analyst on average projected the decrease of 350,000 barrels.

Crude oil futures declined and ended below the level of $90 per barrel for the first time since October 2011. Crude oil fell in reaction to eased tensions on global supply concerns as investors expected a deal between Iran and the International Atomic Energy Agency.

The crude oil futures contract for July delivery declined 2.1 percent or $1.95 to settle at $89.90 per barrel on the New York Mercantile Exchange. The respective contract touched its intraday low of $89.28 per barrel. The London’s Brent crude oil also fell 2.4 percent or $2.63 to settle at $105.78 per barrel on the ICE Futures Exchange.

Among other energy commodities, gasoline futures contract for June delivery declined 2.2 percent or $0.065 to $2.87 per gallon while heating oil futures contract for the same month delivery fell 1.7 percent or $0.05 to settle at $2.81 per gallon.

Natural gas futures contract for June delivery gained 1.1 percent or $0.03 to $2.74 per million British thermal units.

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