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Oil prices trading around $77 after US oil demand data
Published on February 4, 2010 by oilprices · No CommentsCrude oil prices ended trading on Wednesday around the $77 dollar mark as the US government released data showing weak oil demand. US Light crude oil futures for March delivery settled 25 cents, or 0.3%, lower at $76.98 a barrel on the NYMEX, while in London, Brent crude oil futures on the ICE futures exchange settled 14 cents, or 0.2%, lower at $75.92 a barrel.
Data from the US Energy Information Administration showed demand falling 2% from a year earlier in the four weeks ended January 29th. Demand has yet to bounce back from year ago levels, despite months of slow improvement in economic conditions and now with some of the worst weeks of last year’s recession as a basis for comparison.
The oil market came into the weekly inventory data up 6% since Friday, riding a wave of momentum from a series of strong US economic indicators, including gains in home sales and manufacturing activity. But futures struggled to advance after the API’s report Tuesday of a large jump in crude stockpiles, typically a sign of poor oil demand.
Wednesday’s EIA data confirmed that any improvement in the US economy has yet to fully show up in the oil market.
Oil has “rallied very hard, very fast in the last couple sessions….It’s going to be very hard to sustain,” said Matt Zeman, president of trading at LaSalle Futures Group in Chicago. “Supplies are very high, and demand is just not there.”