U.S. Crude Oil Inventories Continue to Fall

U.S. Crude Oil Inventories Continue to Fall

Consistent with recent seasonality and an emergent economic recovery, U.S. crude oil inventories declined for the forth time in five weeks. The U.S. Energy Information Administration reported that U.S. crude oil inventories had fallen to 332.8 million barrels for the four-week period ended September 11, 2009. All said, U.S. crude oil inventories are now 5.5% lower than the 352.0 million figure for the four-week period ended August 7, 2009. During the same period, U.S. crude oil consumption has increased 2.9%.

With OPEC having decided to leave its production goals unchanged in its most recent meeting, the U.S. and major international economies showing signs of stabilizing or emergent growth, and seasonality continuing to prevail, these developments will very likely preclude a collapse in the price of crude oil predicted by one analyst this year. Instead, oil market fundamentals continue to suggest that any declines would be far shallower. With some recent computer guidance suggesting a possibly colder than normal heating season for populated areas in North America, an increase in crude oil prices as the heating season approaches or commences is plausible.

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