Oil Stockpiles Increase As Prices Drop
After a week of gains, oil prices per barrel fall to just above the $50 mark in trading on news of surpluses.
Supply and demand drive oil just like any other consumer good or service. The US has continued to add to its crude oil inventories, increasing them by 2.7 million barrels last week. The stockpile now stands at about 329.7 million barrels.
Gasoline stocks increased as well, to 213.7 million barrels, a gain of 187,000 barrels.
Yesterday, light crude closed at $50.45 per barrel. After-hours trading saw that price fall to $49.90, while in London, pricing for Brent crude dropped to $49.52. In a Bloomberg report, one analyst envisions prices of $43 this summer.
Demand in the world has been the force driving oil prices up, but that demand has started to be tempered by the associated rise in costs.
Political volatility in the world will keep prices high as well; part of the current price per barrel includes a premium of about 6 or 7 dollars. That’s based on the fears of what impact strikes or terrorism would have on OPEC’s production capacity.
David Utter is a staff writer for WebProNews covering technology and business. Email him here.