Crude oil prices are higher than ever before recorded in history as weak US fundamental data was released yesterday regarding the housing sector. The data showed that the housing crisis continues to deepen and that there is no bottoming out for the housing sector anytime soon.
As the US economy is continuing its fall, the greenback remains to lose its momentum against major currencies. Since investors tend to invest in the crude oil market as a hedge against a weak dollar and inflation, crude oil prices remain soaring. The contract yesterday gained $1.14 per contract as it the markets were closed at $114.93 while recording a high of $115.14 per barrel and a low of $112.19 per barrel.
A major support to crude oil prices rallying would be the EIA report that was released yesterday showing that even though the US was in recession, crude oil was still at demand as the summer season is approaching us, as the report showed a decrease in inventories. Oil prices today hit an all time high of $115.21 per barrel while traders turned all their attention to the crude oil supply in the US. Today the market opened at $115.00 while recording a low of $114.77 per barrel.
The EIA released their petroleum report yesterday showing that the U.S. commercial crude oil inventories decreased by 2.3 million barrels from the previous week. At 313.7 million barrels, U.S. crude oil inventories are in the lower half of the average range for this time of year. Total motor gasoline inventories decreased by 5.5 million barrels last week, and are above the upper limit of the average range. Both finished gasoline inventories and gasoline blending components inventories decreased last week. Distillate fuel inventories increased by 0.1 million barrels, and are in the lower half of the average range for this time of year.
As long as the EIA reports keeps coming out showing a decrease in crude oil inventories in the US, oil prices will continue in surge as the US is known as the largest crude consumer. Also as the US dollar continues to depreciate traders will be more attracted to the crude oil markets as it has higher returns, especially since it is cheaper for foreign investors as they hold a stronger currency.
| Support | 113.59 | 112.25 | 111.22 | 110.38 | 109.63 |
| Resistance | 115.21 | 115.98 | 116.51 | 117.04 | 118.51 |
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