Oil Declines Despite Lower Stockpiles
Crude oil declined today based on the poor expectations of the market participants regarding the situation with eurozone’s debt crisis. The commodity failed to benefit from the surprising dwindling of the commercial inventories reported by the US Department of Energy today.
The yield on Spanish 10-year bonds rose more than 5 percent today and was again above 6 percent per year, following the concerns of faster GDP contraction expressed by the country’s central bank. Bank of Spain released its quarterly Economic Bulletin. Intensification of the European economic woes leads to expectations of lower demand for oil, driving its price down.
Last week, the crude oil inventories experienced an extraordinary gain of 8.5 million barrels and pushed the price down at a highest pace in at least a year. Today, the unexpected drop in the inventories of 2.4 million barrels failed to stop the ongoing price slump. Although the commodity retreated from daily lows, it is still trading below the level reached just before the inventories report release.
Brent crude fell from $109.80 to $108.94 per barrel, while Light Sweet declined from $91.23 to $89.51 per barrel, as of 15:32 GMT today. The former has reached a daily bottom at $108.34, the latter — at $88.95 — its lowest since August 3.
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