This week’s latest reports have shown a rise in crude oil inventories in USA, intensifying concerns of a demand recovery in industrialized nations as Europe struggles to manage Greece's debt crisis. The dollar strengthened against a basket of currencies, reduingc the appeal of commodities for investors. Concerns abound about the economic health of Europe and consequently oil demand.
Crude contract fell to US$81.3 on the Nymex, while ICE Brent for May dipped to US$80.2 in London. The report by API showed a 7.5 million barrel jump in crude inventories for the week ended March 19, five times as much as forecast in a Reuters poll. Refiners are trying to maintain their margins by cutting crude runs to keep product inventories down. Higher-than-average stocks of heating fuels have been partially absorbed by an unusually cold winter across the northern hemisphere and rising demand from emerging Asian economies. But US crude stockpiles continue to expand due to growing imports as the Organization of the Petroleum Exporting Countries (OPEC) exceeds output targets. OPEC has agreed to leave production targets unchanged until its next meeting in October.