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EIA report |
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2.3 million barrels |
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| Forecast |
1.5 million barrels |
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| Analysis |
Crude oil fell for the fourth day as the signs of a
slowing U.S. economy indicate that demand on oil from the
world's largest oil consumer will falter, markets fell
despite that President Barack Obama signed legislation
yesterday that will cut federal spending by $2.1 trillion or
more over the next decade, in addition Moody's Investors
Service assigned a negative outlook for the Aaa rating, in
addition to the EIA report which will be released today.
Light sweet crude oil opened today at $93.25 a barrel
recording the intraday high at $93.58 a barrel and a low of
$92.83 a barrel and is currently trading around $93.04 a
barrel. Also a strengthening dollar may be an additional
reason for the crude to fall as the dollar surged yesterday
and now it's trading within a narrow range as the USDIX
opened today at 74.45 recording the highest at 74.68 and the
lowest at 74.34 and is currently trading around 74.38.
President Barack Obama signed into law a bill to raise the
country's $14.3 trillion borrowing limit yesterday,
after U.S Senate gave final approval on a debt-ceiling
compromise. On Monday The U.S House passed the deficit
reduction measure by 269-161 vote, and then was followed with
U.S Senate passing the compromise measure by 74-26 vote,
which imposes to raise the debt-limit by at least $2.4
trillion and shave government spending by almost $2.5
trillion over the next decade. On the other hand, rating
agencies kept concerns somehow evident, where although
Moody's Investors Services and Fitch Ratings confirmed their
triple-A ratings to the U.S, Moody's assigned a "negative
outlook" for the U.S debt rating, while pointing U.S. debt
rating could be vulnerable to potential downgrade unless
lawmakers pursue debt reduction measures and economy
strengthens. Yesterday the Department of Commerce reported a
gloomy income report which was already expected as this past
period overall economic conditions weakened along with
ongoing high jobless levels weighting on all of the economy's
sectors. Also, the American Petroleum Institute yesterday
said crude stockpiles declined 3.31 million barrels last week
to 354.9 million, while gasoline supplies increased 2.55
million barrels to 212.2 million. Today the energy department
report or the EIA report will be released and expected to
show that crude inventories climbed 1.5 million barrels. |
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.