WTI oil price trading back near $77 on US supply jump

28 July 2010 28 July 2010

BonTrade

WTI oil prices are trading back near the $77 mark Wednesday in Asia after a report showed that US crude supplies jumped higher last week, suggesting that crude oil demand in the US remains weak.

US Light crude oil futures for September 2010 delivery were at $77.40, 07.00 GMT on the NYMEX after slipping to $77.00 a barrel earlier this morning.

Crude inventories jumped 3.1 million barrels last week, the American Petroleum Institute said late Tuesday. Analysts had expected a drop of 2.3 million barrels.

“With the price near $80, there would have to be some extreme bullishness to witness a break to the upside. The price of oil should stay in the $75 range for now.” Sander Capital said in a report.

In the absence of any clear sign that western economies are going to recover or have a double dip, oil prices have taken almost daily cues from stock markets.

“Falling consumer confidence in the US and the growing likelihood of a double dip in house prices have put a further dent in the already deteriorating outlook for consumption growth,” research house Economics said.

Oil prices tumbled in US trading hours yesterday after a closely watched survey showed that US consumer confidence plunged to its worst level in five months.