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Oil falls below $36
Crude price drop accelerates after government report shows that inventories of gas and heating fuel increase more than expected.
By Catherine Clifford, CNNMoney.com staff writer
Last Updated: January 14, 2009: 11:29 AM ET
NEW YORK (CNNMoney.com) -- Oil prices fell below $36 a barrel Wednesday after the government's weekly supply report and fresh recession concerns continued to chip away at demand.
The government's weekly supply report showed that demand for gasoline continued to be well below the same time last year, as was the demand for distillates, which are used to make heating oil, among other products.
Meanwhile, grim retail sales reports released Wednesday showed consumer weakness, pulling the Dow Jones industrial average down as much as 300 points.
Light, sweet crude for February delivery was down $2.11 to $35.67 a barrel. Oil traded down just 39 cents prior to the report's release.
The recession has caused crude oil prices to fall off for months. Crude prices hit a peak of $147.27 a barrel in midday trading on July 11. Since then, demand for crude oil has steadily fallen off, bringing prices with it.
Supply report: In its weekly inventory report, the Energy Information Administration said stockpiles of gasoline increased by 2.1 million barrels. Analysts were looking for a build of 1.8 million barrels, according to a consensus estimate of industry analysts surveyed by Platts, a global energy information provider. Gasoline stockpiles were in the upper half of the average range for this time of year.
Retail gas prices were significantly off their summer highs. But even as the pain at the pump eased, drivers were cutting back on their miles on the road. According to the report, gasoline demand has averaged 8.9 million barrels per day over the last four weeks, down by 2.1% from the same period a year earlier.
Crude stocks increased by 1.2 million barrels in the week ended Jan. 9. Analysts were looking for a more substantial build of 3 million barrels of oil. At 326.6 million barrels, oil inventories were above the upper limit of the average range for this time of year.
Distillates, used to make heating oil and diesel fuel, increased by 6.4 million barrels and were above the upper limit of the average range for this time of year. Analysts were looking for a much more modest increase of 1.7 million barrels in distillates.
Even as winter cold sets in and demand for heating oil should be rising, demand for distillates was much lower than last year. According to the report, over the last four weeks, distillate fuel demand has averaged about 4.1 million barrels per day, 2.4% below the same period last year.
Refineries were still pumping, however. Refineries process raw crude oil into usable products like gasoline and distillate oil. Last week, refineries operated at 85.2% of their operable capacity, which was higher than the 83.7% capacity analysts were expecting.
Recession talk: [more] http://money.cnn.com/2009/01/14/markets/oil/index.htm?postversion=2009011411
Crude price drop accelerates after government report shows that inventories of gas and heating fuel increase more than expected.
By Catherine Clifford, CNNMoney.com staff writer
Last Updated: January 14, 2009: 11:29 AM ET
NEW YORK (CNNMoney.com) -- Oil prices fell below $36 a barrel Wednesday after the government's weekly supply report and fresh recession concerns continued to chip away at demand.
The government's weekly supply report showed that demand for gasoline continued to be well below the same time last year, as was the demand for distillates, which are used to make heating oil, among other products.
Meanwhile, grim retail sales reports released Wednesday showed consumer weakness, pulling the Dow Jones industrial average down as much as 300 points.
Light, sweet crude for February delivery was down $2.11 to $35.67 a barrel. Oil traded down just 39 cents prior to the report's release.
The recession has caused crude oil prices to fall off for months. Crude prices hit a peak of $147.27 a barrel in midday trading on July 11. Since then, demand for crude oil has steadily fallen off, bringing prices with it.
Supply report: In its weekly inventory report, the Energy Information Administration said stockpiles of gasoline increased by 2.1 million barrels. Analysts were looking for a build of 1.8 million barrels, according to a consensus estimate of industry analysts surveyed by Platts, a global energy information provider. Gasoline stockpiles were in the upper half of the average range for this time of year.
Retail gas prices were significantly off their summer highs. But even as the pain at the pump eased, drivers were cutting back on their miles on the road. According to the report, gasoline demand has averaged 8.9 million barrels per day over the last four weeks, down by 2.1% from the same period a year earlier.
Crude stocks increased by 1.2 million barrels in the week ended Jan. 9. Analysts were looking for a more substantial build of 3 million barrels of oil. At 326.6 million barrels, oil inventories were above the upper limit of the average range for this time of year.
Distillates, used to make heating oil and diesel fuel, increased by 6.4 million barrels and were above the upper limit of the average range for this time of year. Analysts were looking for a much more modest increase of 1.7 million barrels in distillates.
Even as winter cold sets in and demand for heating oil should be rising, demand for distillates was much lower than last year. According to the report, over the last four weeks, distillate fuel demand has averaged about 4.1 million barrels per day, 2.4% below the same period last year.
Refineries were still pumping, however. Refineries process raw crude oil into usable products like gasoline and distillate oil. Last week, refineries operated at 85.2% of their operable capacity, which was higher than the 83.7% capacity analysts were expecting.
Recession talk: [more] http://money.cnn.com/2009/01/14/markets/oil/index.htm?postversion=2009011411
Maybe this a portent of our banking sytem.
:laugh:
