No sign of economic turn in the oil market as supply soars
One thing consumers can keep crossed off their worry list: the risk of a jump in oil prices anytime soon.
The latest supply data from the Energy Department show U.S. crude stockpiles continue to rocket as demand wanes.
From Bloomberg News:
Oil inventories rose 3.86 million barrels to 370.6 million last week, the highest since September 1990, the government said. A 2.5-million-barrel increase was forecast, according to a Bloomberg News survey.
"This was another incredibly ugly report," said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures in New York. "Supplies in every category were up. There is plenty of everything."
On the demand side, total daily fuel demand in the four weeks ended April 17 was off 6.5% from a year earlier, the Energy Department said.
Overall, the oil picture doesn’t suggest that an economic recovery is underway. But lower energy prices ultimately should help fuel a recovery by leaving more cash in consumers' pockets.
The continuing surge in crude inventories has pulled oil down from $54.34 a barrel on March 26. June oil futures are trading around $48.50 today, little changed from Tuesday.
Gasoline prices have leveled off in recent weeks, as my colleague Ron White noted Tuesday. Although prices are expected to rise, as usual, for the summer driving season, some experts are predicting the cheapest seasonal prices since 2005, White said.
Even as U.S. oil demand weakens, crude oil imports have been rebounding in recent weeks.
Crude oil imports rose 4.9% to 9.86 million barrels a day last week from the previous week.
"Imports are up even though the economics aren’t good here," said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Mass. "This is probably a sign that demand in the rest of the world is a lot worse than suspected."
-- Tom Petruno
Photo: Drilling for oil near Decatur, Ill. Credit: Seth Perlman / Associated Press