Oil Price Drops as Supply Outweighed Rising Demand Expectations

The current oil price slid to $93 per barrel as data of increasing crude inventories outweighed a prediction of rising demand this 2013.

On the New York Mercantile Exchange (NYMEX), the U.S. benchmark for delivery in February was 9 cents lower at a crude price per barrel of $93.06. During yesterday’s trading, it shed 4 cents to settle at $93.15 per barrel.

According to the recent report of the American Petroleum Institute (API), the crude and gasoline inventories of the United States grew in the past week by 2.4 million barrels and 7.9 million barrels, respectively.

Those numbers were greater than the expected increase of 1.5 million crude oil barrels and 2.6 million gasoline stocks by analysts polled by Platts, McGraw-Hill’s energy information branch.

The report of the U.S. Energy Information Administration of the nation’s crude inventories is about to be released soon.

In an email commentary, CMC Markets’ Mr. Michael Hewson said that the view for world commodities will most likely stay uncertain in the coming twelve months, with weak growth obstructing demand, particularly in Europe.

On London’s ICE Futures Exchange, Brent, the benchmark used to set prices of international oil varieties, moved 1 cent lower to a crude price per barrel of $111.93.

In other NYMEX trading, wholesale gasoline shed 1.84 cents to its current price of $2.766 per gallon. The cost of heating oil moved 0.55 cent higher to $3.064 per gallon. The cost of natural gas dropped 4.8 cents to $3.17 per thousand cubic feet.

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