Thursday, June 26, 2008

Oil prices slide on surprise US inventory data

LONDON: Oil prices dived on Wednesday after official data revealed an unexpected rise for crude stockpiles in the United States, the world's biggest energy consumer, traders said.
The market was meanwhile awaiting the US Federal Reserve's latest decision on US interest rates due later today.

New York's main oil futures contract, light sweet crude for August delivery, slumped $3.50 to $133.50 per barrel.

Brent North Sea crude for August tumbled $3.46 to $133.

The US Department of Energy said that stockpiles of crude had risen for the first time in six weeks, by 800,000 barrels, in the week to June 20. Analysts had expected a drop of 1.1 million barrels.

Oil prices could rebound later Wednesday, however, in the wake of the Federal Reserve's decision on American borrowing costs.

"The US central bank is expected to leave interest rates unchanged at 2 per cent amid disappointing data recently, which could put some pressure on the dollar and support crude futures," said Sucden analyst Andrey Kryuchenkov.

NVDL: I believe high oil prices are good, as are high interest rates. Why? We need to learn now to consume in different ways (that means less) and adapt (change our lifestyles, become less car and suburbia dependent). The future will be even more difficult, and the more we postpone and find ways to borrow ourselves out of trouble, and slower the collective adaptation. Time is not on our side.

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