Crude Oil Jumps on Wednesday on Upbeat Inventories Data

Crude oil futures gained on Wednesday on the latest US inventories data. As per latest report of Energy Information Administration crude oil inventories reduced by 5.2 million barrels for the week ended August 5th, 2011 while analysts expected the increase of 1.8 million barrels for the respective week.

EIA reported the increase of 1.6 million barrels in gasoline inventories while the distillates stockpiles declined by 700,000 barrels for the week ended August 5th. Analysts for hoping for decrease of 1.2 million barrels of gasoline stockpiles while distillate inventories were expected to increase by 1.2 million barrels for the respective week.

Crude oil futures contract for September delivery gained 4.5 percent or $3.59 to settle at $82.89 per barrel on Wednesday at New York Mercantile Exchange. The respective contract reached its day’s high of $83.14 per barrel yesterday. Crude oil has gained 9.3 percent in the current year till now.

Gasoline futures contract for September delivery also advanced 4.3 percent or $0.11 to $2.78 per gallon while heating oil futures contract for September delivery surged 3.6 percent or $0.10 to $2.87 per gallon.

EIA also reduced its demand outlook for crude oil by 60,000 barrels per day due to increasing oil prices. Energy Analysts from MG global commented, “In a best-case scenario, we would like to see commodity prices settle into a sideways trading range for the balance of the year at relatively low levels; this would help keep inflation at bay and allow central banks room to back away from further rate hikes.”

Among other contracts natural gas for September delivery gained 0.2 percent of $0.01 to $4 per million British thermal units.


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