Markets

Fundamental Oil Report (2010-10-21)

News Crude slides below $82 on sluggish Chinese growth in the third quarter
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Analysis Crude fell below $82 per barrel today as greenback jumped, while the Chinese economy expanded above expectations in the past quarter yet still the pace is slowing. Crude today hovers around $82 per barrel recording its highest around $82.66 and lowest around $81.83, while it currently is trading around $82.07 per barrel. The anticipated EIA report yesterday showed an unexpected rise in inventories by 0.7 MB compared to the previous reading of a drop by 0.4 MB, lower than expectations of an increase of 1.5 MB. Motor gasoline rose 1.2 MB last week and remains above the medium term average, alongside distillates that include heating oil which recorded a drop of 2.2 MB above the medium term average range for this time of year. Moreover, one of the factors that played a role in the black gold's decline was the Chinese economy's slowing growth; sparking concerns regarding global demand in the world's largest energy consumer. China announced that growth in the third quarter of this year was 9.6% higher than expectations pointing to a growth by 9.5%; slowing from the previous quarter's 10.3%. This slowdown in growth is causing an inflationary expansion that is negatively weighing on the economy by pumping liquidity in Chinese financial markets, paving the way once again for a rise in the value of the Yuan against the dollar. As for NYMEX as of 04:15 EST; motor gasoline remained flat recording $208.260 per gallon; heating is trading around $224.870 per gallon losing $0.27; whereas natural gasoline followed and dropped $0.59 to record $3.518. In London, Brent futures declined $0.08 to record $83.530.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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