Crude Oil traded below the $100 a barrel mark (a strong support) for the first time since February as U.S. crude stock piles reached the highest level in 21 years. Crude Oil June Futures fell over 3%, by $3.17 to $99.37 a barrel on the NYMEX. The sharp Crude Oil decline may also have been triggered by a disappointing U.S.jobs report and amid warnings of a weakening world economy. The last time Crude Oil Futures traded below $100 was on Feb. 13. Crude Oil crossed the $100 level 21 times during the past year. It rose as high as $113.93 per barrel last April and fell as low as $75.67 per barrel on Oct. 4.
Any sustained momentum below $100 can lead to a further sharp decline to $96 also. But if Crude Oil gathers support in the range of $99.55 to $100 range, then futures may again rise upside.
Crude Oil and other commodities also plunged across the board on Thursday as slower-than-expected growth in theU.S. services sector sparked a wave of selling and prices crashed through technical support levels. Economists are also increasingly focused on weakening oil demand. American oil consumption has dropped 5.3% in the first quarter.
U.S. Crude Oil inventories increased 2.84 million barrels to 375.9 million in the week ended April 27, the most since September 1990, according to an Energy Department report May 2. U.S. Domestic output gained 8,000 barrels a day to 6.12 million, the highest level since November 1999. Fuel demand declined 1.1% to 18.5 million barrels a day in the seven days ended April 27. The weak U.S. economic data from the past two days have sparked doubts that oil demand will recover in theUS, the world’s largest consumer of oil.
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