Large build-up in US crude oil inventories

Published on March 01, 2010 07:30:00 IST

A large build-up in U.S. crude oil inventories and poor consumer confidence figures were the catalysts for lower crude oil prices last week.

Some slack in the outlook for near-term demand, particularly in the United States, coupled with continued economic uncertainty could keep prices below $80 this week. The trading range could be $75 - $82 as erratic investor sentiment pushes and pulls at prices.

The U.S. Department of Energy reported a 3.03 million barrel increase in crude oil stocks, well above market expectations. The majority of the build occurred on the west coast of the United States.

The supply overhang in both the crude and product markets is expected to keep near-term price gains in check. Despite the recent economic weakness the United States remains the largest oil consuming country, accounting for more than 22% of global demand.

The most likely source of upward pressure on prices in the near term would be Middle Eastern political tensions, but these factors seem unlikely to provide any price impetus at present.

Source: http://www.commodityonline.com/futures-trading/technical/Large-build-up-in-US-crude-oil-inventories-14687.html