Crude oil down on demand speculation

23 June 2010

Written by Bob Burton

Crude oil prices were down for a second day on the New York Mercantile Exchange this morning (June 23rd), moving towards $77 a barrel and under pressure after a weak demand report.

The industry-funded American Petroleum Institute (API) released figures showing a 3.69 million-barrel rise in crude inventories in the US last week, suggesting a weakening of demand.

However, Bloomberg reports that government figures due out later today may point to a decline in fuel stocks.

There are frequently discrepancies between the API figures and the Energy Information Administration's weekly report, but the latter is generally assumed to provide a more comprehensive and reliable portrait of the demand situation in the US.

David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney, told Bloomberg that trading sentiment is fragile.

"Confidence has been rattled in recent months by European fiscal issues and by data in the US that's been uneven. They're factors that have left markets cautious," he said.