Crude Oil Inventories Highest in 22 Years
Crude oil prices fell to an 8-month low after crude oil inventory figures were released by the US Energy Department. Inventory levels in the US are now the highest since 1990.
Oil future dropped 2.7% and briefly reaching below $81 per barrel. US inventory levels rose 2.86 million barrels to 387.3 million barrels — levels unseen since July 1990. Most analysts were expecting a 1.8 million barrel decline in inventories, so the results were surprising and caused a free fall.
Crude oil August futures fell $2.90 or 3.4% to $81.45 — down 17% in 2012.
Brent oil August futures fell $3.07 or 3.2% to $92.69 — the lowest level in 18 months.
The US Energy Department also released their figures on US oil production. Producing rose to 6.35 million barrels per week — the highest since 1999 and up 12% since 2011.
The US Federal Reserve met today to discuss Operation Twist — the QE3 stimulus plan designed to add $267 billion into the US economy this year. This stimulus plan is different from the past 2 rounds which were conducted by purchasing assets and bonds. Operation Twist will allow the Feds to sell short-term bonds while simultaneously buying long-term bonds to lengthen the average maturity. This will help keep interest rates low.
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