Oil Declines on Europe’s Problems & US Stockpiles

Crude oil slumped today on concerns that the European crisis will hurt the global economic growth and will damp demand for commodities. European Central Bank President Mario Draghi left the key interest rate unchanged and said on the press-conference today that there are downside risks.

Tom Bentz, a director at BNP Paribas Prime Brokerage, commented:

There are still a lot of worries about Europe. Some of the latest comments from the ECB are indicating downside risk but they are not looking to do anything at this time.

Markets remain depressed by yesterday’s negative data from the United States. US inventories of crude swelled to the 21-year high of 375.9 million barrels. On the positive note, US unemployment claims fell from 392,000 to 365,000 last week, more than was anticipated by analysts.

June futures for delivery of crude slid as much as $2.65 (2.5 percent) to $102.57 per barrel by 13:53 on NYMEX. Earlier, the price posted the biggest intraday decline since April 4, falling to $102.46. Brent crude slipped from $118.25 to $115.99 per barrel as of 18:55 GMT on ICE today, touching $115.93 intraday — the lowest price since February 8.

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