Oil Falls on High Inventories, China’s Rising Interest Rates

As of 8:46 am EST, the price of crude had dropped by .76 percent to reach $82.55 a barrel and the price of heating oil had fallen by .78 percent.

HEAT USA Price Report

Today’s average retail heating oil price per gallon: Up $0.01
Morning projection (for Thursday’s average price per gallon): Down $0.03

Oil prices weathered yesterday’s inventory report to post gains on the day, but today analysts are pointing to those same bulging inventories as a reason for the decline in the price of crude and heating oil. Wednesday morning’s EIA inventory report showed a buildup in inventories of crude and a smaller-than-expected drop in distillate stockpiles, but had a muted impact on oil prices. While the fundamentals of supply and demand did not move oil markets yesterday, some investors foresee a correction that would bring down crude and heating oil prices and have withdrawn some money from those commodities. Further caution was suggested by China’s interest rate hike, which will slow lending and economic expansion in the country whose energy demand many consider responsible for oil’s rise in the last year.

HEAT USA price experts report that supply levels of crude oil and heating oil would point to lower prices, but yesterday’s trading showed how small the influence of supply and demand on oil prices can be. Today’s news from China suggests a slower pace of economic growth, and that’s pushing down oil prices.