Weekly crude oil update June 5, 2010

  • From the close of $73.97/ barrel last week, crude oil started the week with modest growth, but on Tuesday, prices fell $1.86 to $72.58 due to weak Chinese manufacturing data which raised concerns that crude demand from the world’s fastest growing economy might be slowing.
  • On following days, with the release of weekly oil inventories which showed a drawdown in oil reserves and good housing and auto numbers from US provided support to the market.
  • But the last day, saw crude prices plunging $3.10 with weaker than expected addition to non-farm payrolls and warnings of Hungarian economy. Weekly close of crude oil was at $71.51, 3.3% lower than last week’s close.
  • Crude oil prices very recently have rebounded from the lows of $67 and now seem to be consolidating at this level. We expect further drawdown in inventories in the coming weeks due to strong fuel demand. Thus unless we see any negative developments in the Eurozone, crude price are expected to rise in near term.

Author name:Praveen Bajaj

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