Crude Slides - Inventory Report Surprises

Casey's Daily Resource Plus (07/02/2009)
"In the energy market on Wednesday, crude for August delivery dropped off, closing at $69.89/barrel, down $1.60. August reformulated gasoline lost 4.3 cents, to $1.859/gallon.

'We feel [oil is] very overbought at these levels and crude has had a very hard time putting new highs right now,' said Zachary Oxman, of TrendMax Futures. 'I see the markets settling down for a few months before the fourth quarter.'

In its weekly inventory report, the Energy Information Administration said crude stocks unexpectedly rose 2.33 million barrels in the week ended June 26, advancing for the first week since late May.

Gasoline supplies increased 2.3 million barrels and distillates were up 2.9 million barrels. Both numbers were higher than expected. And total U.S. daily fuel demand in the four weeks ended June 26 was down 5.8% from a year earlier, the EIA said.

'Supply and consumption remain really bad,' said Bill O'Grady, the chief markets strategist at St. Louis-based Confluence Investment Management. 'It's hard to make a bullish case for anything.'"

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