Oil Prices on Wednesday, November 16, 2011 plummeted below $99in Asia, as a response to a report from US that showed increased Crude Oil supplies from the US. This made a weak demand an obvious fact.
Likewise benchmark crude up for delivery in December recorded a 70 cent fall, and reached to $98.67 per barrel in the Singapore electronic trading, on NY Mercantile Exchange. In New York though, it rose by $1.23 and settled finally at $99.37.
Brent Crude up for January delivery dropped by 67 cents and was around $111.51 per barrel on the ICE Futures Exchange, London.
The Crude supplies from US, said the American Petroleum Institute added another 1.3 million barrels, contrary to the predictions of analysts by Platts, the energy information wing of McGraw-Hill Cos, which estimated a fall in supply by 1.5 million barrels.
Parallel inventories of gasoline fell by approximately 2.9 million barrels, and distillates fell by 2.6 million barrels as reported by the API. The crude prices have been surging since late October hoping on a better US response to the expected recession, retail sales too raised in the same month, the fifth straight, said the Commerce Department.
"Market momentum remains heavily skewed toward the upside," Ritterbusch and Associates – energy consultants said in a report. "We still expect an advance into the $100-102 zone as early as Wednesday."
In the upcoming week thus traders will keenly be watching the scores of US industrial production and housing.
It is the recent consumer reports that show they are highly spending and thus allowing other manufacturing activities to grow, this has led to the current position. Nigeria, one of the top five countries that export oil to the US has as well complained of a recent fall in oil production rates due to spillage.
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