Crude down on demand weakness

19 February 2010

Crude oil prices dipped for the first time in four days this morning (February 19th) as data from the Energy Information Administration (EIA) showed an unexpected build in crude oil and gasoline inventories.

Figures from the organisation showed a 3.1 million-barrel rise in crude inventories, while gasoline stocks rose 1.7 million barrels, offsetting a drawdown in distillate inventories, which include heating oil.

Reacting, crude oil prices fell back below $78 (£51) a barrel on the New York Mercantile Exchange after settling above $79 yesterday. Heating oil contracts also fell on the bourse this morning as demand concerns weighed.

"My reading of the EIA report was that it was a bit of a mixed bag and not particularly supportive of the oil price," said David Moore, a commodity strategist at Commonwealth Bank of Australia, speaking to Bloomberg.

Gains in the dollar also weighed on crude and heating oil this morning as foreign investors shied away from dollar-priced assets.

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