Oil Prices Fall Close to $96

The current oil price dropped closer to $96 per barrel following reports that showed an increase in U.S. crude supplies during the past week and an acceleration of China’s inflation.

On the NYMEX, the U.S. benchmark crude for delivery in June was 49 cents lower, at $96.13 per barrel. During the previous trading day, the contract gained 1 cent to end at $96.62.

Prices were weak after two released oil supply reports reminded traders that inventories are sufficient.

According to the API, crude inventories gained 680,000 to 389.1 million barrels. The Energy Department, in a separate report, also said that the supplies of oil gained 200,000 barrels in the past week to 395.5 million barrels.

Even if the rise did not meet expectations, the steady growth in supplies presented that market fundamentals are not in favor of a lengthened rally in the prices of crude, according to a poll of market analysts.

The higher-than-expected figures of China’s inflation also pulled back the price of oil as it concerns the Fed that the increasing prices may slow down the second biggest consumer of oil in the world. Consumer costs rose by a yearly 2.4 percent during the month of April from 2.1 percent in March. That exceeded predictions of a 2.2 percent increase.

Markets are waiting for the upcoming report of the U.S. Labor Department on the unemployment claims in the past week, a primary measure of the economy’s health.

On London’s ICE Futures Exchange, Brent was 54 cents lower to $103.80 per barrel.

In other NYMEX trading, wholesale gasoline moved 1.52 cents lower to $2.8386 per gallon. Heating oil shed 0.34 cent to a price of $2.9113 per gallon. Natural gas fell 3.5 cents to a price of $3.943 per 1,000 cubic feet.