Crude inventories rise in USA, indicate weaker demand

22-Apr-10

New York's main contract, light sweet crude for delivery in June, dipped to settle at $US83.68 a barrel, while London’s Brent North Sea crude for June rose to $US85.70. Oil prices dipped in New York on release of report by the US government's Department of Energy (DoE) showing a 1.9 million barrels increase in American crude reserves in the week ending April 16 vs market expectations of a drop of 200,000 barrels. Tuesday saw oil prices rise for the first time in three days as strong corporate earnings reports of Citigroup and IBM dampened worries over the Goldman fraud case. The Goldman scandal jolted the stock markets, sent the Dow Jones industrial average (INDU) down by triple digits. These concerns overflowed on to the oil markets as traders feared that the bank's distress could have a ripple effect on the economic recovery and dampen demand. Though prices were down more than 1% in the past week, to their lowest levels since early March, crude prices were still 60% higher than a year ago.