Commodity Blog

Crude oil tumbled to the lowest in a month in New York on speculation that China will raise interest rates and as equities slid after U.S. President proposed restrictions on risk-taking at financial institutions. Oil also slid this week as the dollar rose, curbing the demand for commodities as an inflation hedge and investor confidence decreased on declines in equity markets.

Fuel consumption in the U.S. fell 1.8 percent in the past four weeks compared to a previous year. Refineries ran at 78.4 percent of capacity in the U.S. last week, the lowest rate since 1989, barring the Atlantic hurricane season. Gasoline stockpiles rose 3.95 million barrels to 227.4 million last week, the record level since March 2008.

March delivery for crude oil dropped $1.17 (1.5 percent) to $74.91 per barrel by 10:15 on the New York Mercantile Exchange. Some analysts think that there shouldn’t be any significant changes in the market in the next few days after decline. But there is probability that crude oil may decline next week as U.S. fuel consumption falls and refineries idle units.

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