Commodity Futures Trader

Posts Tagged ‘economic data’

Crude oil prices cruised to their highest level of 2010 Wednesday morning, before quickly reversing, as speculators consider new data on the level of crude supplies released by the Energy Information Administration.

The Oil price contract for April delivery reached $83.03 in early trading on Wednesday as traders showed delight in the new data. A 1.4 million barrel increase was reported in crude last week for a 343 million barrel total inventory level.

According to the Platts survey of analysts, the expectation had been for 2.1 million barrels. The much lower than anticipated level of inventory triggered an immediate upward reaction in trade as investors saw the lower than expected number as a sign of increased demand.

Analysts pointed out that despite the lower than expected inventory number, crude oil levels are still high for the current oil price. Traders seemingly agreed as after the running up to $82, oil prices dropped back in the later morning of the session to close near Tuesday’s price of $81.50.

OPEC, an amalgamation of the world’s largest oil producing and exporting nations, says a stable global economy for the remainder of the year should see an increase in demand of over 900,000 barrels of crude oil per day.

OPEC would prefer oil prices to remain at todays levels, or to go even higher. However, data continues to suggest modest demand in oil products in the US. Business and consumers are still reluctant to begin transporting at pre-recession levels. Without increased gains in US oil demand, it is hard to imagine OPEC’s forecast can hold true.