Messy spill in oil per barrel

Lack of demand bloats inventories, forces frightening dip in price

Writing at the Wall Street Journal’s excellent Environmental Capital blog today, Keith Johnson describes how “deteriorating demand” is besting its rival in the “oil-market tug-of-war between supply-side worries and demand-side gloom.” This morning the commodity fell back to $37.50 a barrel, by sheer coincidence the price that Iran’s state television says the country is using to plan next year’s budget. The commodity, says Johnson, is dropping on the back of bloated U.S. crude oil inventories, which last week rose 4.7 million barrels, almost double what analysts had projected. Also contributing to the volatility is news that the International Energy Agency has again downgraded its demand predictions; if the Paris-based agency is right, Johnson writes, “the world will consume a full 1 million barrels per day less this year than last year.”

The Wall Street Journal

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