Light oil price trading down around $70, commodities sell off

US Light oil prices plunged three percent in trading on Wednesday to finish just above $70 as mounting stockpiles prompted a further sell off of commodities.

“What we’re seeing now is a pretty consistent underlying surplus in the market,” Andrew Keen, metals analyst for HSBC said. “Inventories have always mattered in metals markets,” Keen added.

Sentiments hit the oil markets, where burgeoning stockpiles brought crude prices to a two month low. US Light crude oil futures price settled down $1.95 at $70.67 a barrel, its lowest since October 6th.

Oil prices slid after the Energy Information Administration said the weekly US supply of distillates, which included heating oil and diesel, rose by 1.6 million barrels to 167.3 million barrels. Analysts had forecast a fall of 600,000 barrels.

Meanwhile, the US dollar fell, snapping a three-day advance, although worries about government deficits in Greece and Spain prompted some safe-haven buying that limited the UD dollar’s losses.

Tags:  commodities, light oil price, trading, US dollar