Crude Falls On Big Inventory Build

Crude is under pressure today, dropping to $70 per barrel, after US Dept. of Energy data showed that inventories surged again. The news suggests that demand for crude is drying up due to economic weakness. The news has both good and bad elements; good in the sense that this will translate to lower prices at the pump, bad because it shows a significant decline in economic activity.

Crude for November delivery fell $4.53, or 6%, to $70.01 per barrel on NYMEX. Crude is down over 50% from its recent highs.

The EIA data showed crude inventories rose 5.61 million barrels, which was much more than the 2.6 million barrel build economists were predicting. Gasoline inventories rose 6.97 million barrels, versus the consensus of a 3 million barrel build. Distillate Inventories fell 453,000 barrels, versus the consensus of a 500,000 build.

Unleaded gas futures fell about $0.15 to $1.63.

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