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| Despite a two-day slide of $10.58 a barrel, prices remain about 80 percent above where they were a year ago and up about 40 percent from the start of the year. |
Higher U.S. oil supplies, along with evidence of quickening inflation and slowing economic activity in the world’s largest economy, have helped pull prices down from last Friday’s record above $147 a barrel, said Victor Shum, an oil analyst with consulting firm Purvin & Gertz in Singapore.
“We’ve had a run of bearish news the last few days,” he said. “This roller-coaster volatility has left us in a near-term trading range of between about $130 and $145.”
Midday in Singapore, light, sweet crude for August delivery was up 25 cents at $134.85 a barrel in electronic trading on the New York Mercantile Exchange.
Crude fell $4.14 in the previous session to settle at $134.60 a barrel, after earlier sinking as low as $132. The drop followed a $6.44 sell-off Tuesday, crude’s biggest since the Gulf War.
Despite the two-day slide of $10.58 a barrel, prices remain about 80 percent above where they were a year ago and up about 40 percent from the start of the year.
The Energy Information Administration reported Wednesday that U.S. crude supplies rose 3 million barrels last week. That was opposite the 3 million barrel draw analysts surveyed by energy research firm Platts had expected. Gasoline supplies also leapt higher unexpectedly.
The rise in crude and gasoline supplies shows how high motor fuel prices are starting to weaken demand from U.S. consumers in the middle of America’s summer driving season, analysts said.
The Labor Department also said Wednesday that consumer prices shot up 1.1 percent last month, the second fastest pace in 26 years. Rising energy prices accounted for two-thirds of that increase, which was far worse than expected.
Testifying before Congress for a second day on Wednesday, U.S. Federal Reserve Chairman Ben Bernanke said central bank policymakers are facing “significant challenges” in stabilizing a U.S. economy troubled by weak growth and inflation.
Oil demand in developing nations, however, continues to rise and keep global crude supplies tight, Shum said.
“Only in the U.S. are we seeing significant demand erosion,” Shum said. “Supplies are still struggling, and there’s a reasonable chance for a resurgence in oil prices.”
In other Nymex trade, heating oil futures rose 1.66 cents to $3.8576 a gallon (3.8 liters) while gasoline prices added 0.86 cent to $3.288 a gallon. Natural gas futures fell 13.2 cents to $11.53 per 1,000 cubic feet. undefined undefined
