Oil Prices Drop as Inventories Swell

05/23/2009 05:12 am ET | Updated May 25, 2011

Benchmark crude for June delivery rose 29 cents to $48.84 a barrel by noon in European electronic trading on the New York Mercantile Exchange. "We're going to see another build in crude inventories," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore. "The oil price doesn't belong above $50, and the trend is definitely to the downside". Expectations that massive stimulus packages by governments around the world would spark an economic recovery helped push crude prices above $54 a barrel earlier this month. 1

Oil prices fell Wednesday after the government reported that U.S. petroleum inventories grew more than expected with crude stocks rising to the highest level in nearly 19 years. The Energy Information Administration said Wednesday that U.S. storage houses are flush with the most oil since Sept. 14, 1990. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos, expected a build of 3 million barrels. Gasoline inventories rose by 800,000 barrels, or 0.4 percent, to 217.3 million barrels, which is 1 percent above year-ago levels. "There's an awful lot of oil sloshing around out there," said Michael Lynch, president of Strategic Energy & Economic Research. 2

  1. Oil Hovers Under $49 a Barrel (The Globe and Mail)
  2. Oil Prices Drop as Inventories Swell (Yahoo Energy)



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