| Oil Prices Flat As U.S. Inventories Fall Expectations |
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| Tuesday, 27 July 2010 10:00 | |||||||
Page 1 of 2 Oil prices little changed on Monday local time, because investors consider the expected decline in inventories in the United States and because of concern over the threat of a storm against drilling in the Gulf of Mexico eased.New York's main contract, light sweet crude for delivery in September, ended unchanged at 78.98 dollars per barrel. Brent North Sea crude oil, London, for September delivery rose five cents to 77.50 dollars. Investors factor in a report Monday that U.S. crude oil inventories are expected to show a decrease this week, showed a greater energy demand in the world's largest economy. Last week's inventory data showed an unexpected large increase in crude oil stockpiles. Most analysts released their forecast for the stock this week and "I think that what drives the market back up," said Jason Schenker of analysts Prestige Economics. "The expectation is that they are moving into pulling crude oil." Government data showed a big jump in U.S. new home sales also help stabilize the market. Commerce Department says new home sales increased 23.6 percent to 330,000 units in May revised rate of padaJuni of 267 000, a low point. Investors also digested news that tropical storm Bonnie blew out the Gulf of Mexico over the weekend, after causing disruption to shipping and oil production. "Parts and destruction of Tropical Storm Bonnie, which interfere with around 50 percent of U.S. production in the waters of the Gulf of Mexico last week, has freed some market fears," Sucden analyst at Financial Research said in his notes. However, recovery of normal operation has been slow and has not reached its full capacity, due on Sunday, 46 percent of oil production capacity still off line, according to reports. "Currently, there is plenty of crude oil, distillates and gasoline in storage to make it through some ferocious storms," said Mike Fitzpatrick, vice president of MF Global. New York oil rally toward 80 dollars on Friday because of Bonnie's spinning toward the Gulf of Mexico - but then pulled back after the "stress test" (endurance test) against European banks released. Skepticism over the European banking sector stress testing, which clears all but seven European banks, the stock market received on Monday.
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