Petroleum Prices Bounce On Wall Street Rally, Lower Gas Stocks
Lately crude oil has been tied to stocks.
Bryce Knorr
Published: Oct 29, 2008
Crude oil prices moved sharply higher on Wednesday, following mostly supportive numbers on stocks and expectations for a cut in interest rates by the Federal Reserve.
Prices were already on the move yesterday, rallying off lows near $61 in after hours trading, following the lead of the huge rally on Wall Street. While stocks and oil prices moved in opposite directions on the way up to record levels earlier this year, lately crude has been tied to stocks, with fears of weaker demand due to an economic slowdown hurting energy values.
Crude bucked that trend Wednesday, following release of the government's weekly petroleum inventory report. That report showed crude oil stocks rising only 500,000 barrels in the latest week, far below the 1.4 million expected. Also supportive was the number for gasoline — a 1.5 million barrel drop, the opposite of the increase anticipated by the trade. The only bearish surprise came from distillates, which increased 2.3 million barrels, almost three times more than the 800,000 barrels expected.
However, most of that distillate increase was for diesel, which should continue to lend pressure to fuel prices. To read Bryce Knorr's complete weekly energy review, click HERE.
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