Crude oil for October delivery was little changed over the past week, gaining a meagre 0.35% to trade at $73.62 a barrel. August proved to be a horrible month for sweet crude, losing 11.29%.
It’s been a tug-of-war for oil prices the last week, with sharp equity rallies and equally sharp equity sell-offs adding to the volatility and uncertainty in prices. The current trajectory for oil is pointing lower as the EIA reported yet another increase in crude oil stockpiles on Wednesday, which rose by 3.4 million barrels in the last week. Analysts projected an increase of 1.2 million barrels. However, gasoline and distillates did see a reduction in supplies, falling by a 200,000 and 700,000 barrels respectively. Nevertheless, the combined oil inventories are now at 27 year highs, and at these levels are likely to suppress crude oil prices in the near term. The US is still the world’s largest oil consumer, so until concrete evidence is received that the US economy is gaining traction, the downside risks for oil are expected to remain. Cude oil prices tend to track equity markets very closely, so any ugly surprises from the US non-farm payroll data on Friday could further hurt crude oil prices in the short-term.
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