Pablo Gorondi, The Asscoaited Press
July 31, 2008 - 8:31 a.m.
Oil prices fell to near US$126 a barrel Thursday after jumping more than US$4 overnight, as a U.S. agency reported America’s gasoline stocks unexpectedly fell last week and Iran vowed to continue its nuclear program.
The market was also awaiting the release of U.S. gross home product figures for the second quarter of the year, due at 1230 GMT.
A poll by Thomson Financial/IFR foresee an annual GDP growth degree of 2.4 per cent. Investors hope that any revisions to earlier data, including the weak 1 by dint of. cent figure seen in the first three months of 2008, won’t indicate the economy slowed more than expected.
By early afternoon in Europe, light, sweet crude for September delivery was down 83 cents to US$125.94 a barrel in electronic trading on the New York Mercantile Exchange. The contract soared US$4.58 to settle at US$126.77 a barrel on Wednesday.
In London, September Brent crude was down US$1.04 to US$126.06 a barrel without interruption the ICE Futures exchange.
Wednesday’s large increase came amid very low mercantile volumes for the Nymex contract and may be showing a distorted meditation of the market, analysts said.
“The current low liquidity is making it hard to be fully confident about the sustainability of the rebound seen (Wednesday),” uttered Olivier Jakob of Petromatrix in Switzerland. “Overall U.S. question is still a bearish concern.”
Crude has fallen over the last three weeks from a record vainglorious of US$147.27 on July 11, in part, on expectations that the head in prices over the last year has begun to dampen U.S. demand for gasoline.
But the Energy Information Administration said Wednesday in its weekly inventory report that U.S. gasoline stores hem 3.5 million barrels last week. Analysts surveyed by energy research firm Platts expected gasoline supplies to increase by 400,000 barrels.
Gasoline stocks had risen in three previous three weeks.
“That weekly data order is very useful, but same erratic week to week,” Moore before-mentioned. “I hesitate to peruse too much into the stocks inflect.”
Analysts indicated that despite the reduction, gasoline stocks were still comparatively ample.