Oil Prices Drop on Weak US Demand

As of 8:54 am EDT, the price of crude had fallen by 0.7 percent to reach $68.90 a barrel and the price of heating oil had declined by 0.7 percent.

HEAT USA Price Report

Today’s average retail heating oil price per gallon: Down $0.02
Morning projection (for Thursday’s average price per gallon): Down $0.02

The API’s inventory numbers, released after the close of trading on Tuesday, showed that demand for oil remains weak in the US. Supplies of gasoline rose unexpectedly, adding 981,000 barrels last week. Crude oil inventories fell overall, but supplies at the important storage hub in Cushing, OK, the delivery point for the barrels of oil traded on the NYMEX, rose by over 900,000 barrels. The inventories at Cushing have a disproportionate impact on crude oil prices, so a gain there can have a greater effect on crude oil prices than an overall drop in crude supplies. Stockpiles of distillates, which include heating oil and diesel, fell by 331,000 barrels, against expectations that distillate inventories would increase. Despite the decline in distillates, the price of heating oil has fallen because the inventory report gave the overall indication that oil demand in the US has yet to recover.

HEAT USA price experts report that the EIA releases its more authoritative inventory report at 10:30 am on Wednesday. If the EIA confirms the API’s findings, or has an equally mixed report, oil prices could stay on their downward trend.