Crude Retreats After Better-Than-Expected Inventory Data

Crude prices took a break on their march towards $100 Wednesday, retreating $0.33 to $96.37 on the New York Mercantile Exchange, after the Energy Information Administration's weekly inventory report indicated that crude supplies fell by 800,000 bbls. last week, just half the anticipated 1.6M bbls. decline. One economist said the report "wasn't bad enough" given the sharp drops expected by the market, and that had supplies fallen by 3M-5M bbls., crude could have gushed past $100. Meanwhile, traders who bought crude around $80 less than a month ago may be looking to cash out even though it's practically a given the century mark will be reached. "We certainly would not risk $16 or more for the last $2 or $3 a barrel," one oil analyst told clients. "Because of this, we have to expect to see a number of professional traders take profits before we actually see $100." Earlier in the day, futures had touched a new trading high of $98.62/bbl. after the International Energy Agency predicted that worldwide energy usage would rise 50% by 2030, with 45% of that demand coming from India and China. Despite the overall stretched supply of world oil resources, some are surprised record prices are being set just now, a period generally characteristic of slack demand between the summer cooling and winter heating seasons.

Sources: CNNMoney.com, MarketWatch
Commentary: Oil Prices to Stay High, EIA Says • Is the Oil and Energy Bubble About to Burst?

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