June Crude Plummets After Energy Report
Light sweet crude began plummet after the weekly report from the U.S. Dept. of Energy on Wednesday morning. After going to $49.35 earlier in the day, the price dropped to $47.65 quickly after the report was issued. Gasoline futures also saw a penny drop to $1.42 a gallon.
The Department of Energy reported a large growth in inventories with crude climbing 4.3 million barrels and gasoline stocks going up 1.1 million barrels. This inventory growth comes as prices have come down from their all time high of over $58 a barrel back during the first part of Apri.
In response to those highs and much speculation about the ability to keep inventories sufficient, OPEC ramped up production over their official quotas to the near capacity level of 30 million barrels per day (bpd). OPEC has made constant assurances they can handle the production levels for the growing worldwide demand.
The Saudis have also promised to keep the levels jacked up to deal with the upcoming fourth quarter. “One of the reasons inventories are built is to anticipate fourth-quarter demand. In the fourth quarter, there’s no question that production will increase,” Reuters reported Saudi Oil Minister Ali Al-Naimi saying.
”I stand here to tell you that Saudi Arabian reserves are plentiful, and we stand ready to raise output as the market dictates,” Naimi said at an energy confidence in Washington on Tuesday.
John Stith is a staff writer for WebProNews covering technology and business.