Crude Falls on Surprising Increase in Inventories

Nov.15.07 | About: The United (USO)

Crude futures fell Thursday, after the Energy Department announced an unexpected increase in U.S. crude inventories. The inventories rose by 2.8 million barrels last week, while analysts were expecting a decrease of 700,000. The front month crude contract traded down $1.71 to $92.38 on the news. "Rather weak demand numbers are still showing up in the weekly data. That's reflective of the trend that we've seen," said Eric Wittenauer at AG Edwards. Oil prices are up 40% since mid-August, but have recently seen some weakness resulting from speculators taking profits and OPEC lowering its world demand forecast because of the economic slowdown anticipated in the U.S. Also at the Nymex, front month gas contracts fell $0.0389 to $2.3315/gallon after the Energy Department said gasoline supplies increased by 700,000 barrels last week, while distillate fuel stocks fell by 2 million barrels.

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