Regal Group Financial: U.S. oil stockpile levels drive oil below $75.

Sept. 23, 2010 - PRLog -- On the NYSE oil prices are hovering at around $75 a barrel after the U.S. administration released a report indicating that the nation’s crude inventories had increased significantly, adding to signs of a slowing economy.

Oil futures dipped on the back of an announcement by the U.S. Energy Department that stockpiles had risen by 970,000 barrels to 385.3 million barrels. Gasoline stocks also grew and are sitting at more than 15% higher than their-five year average, with distillate stockpiles 23.3 %higher than the five-year mean.

“The builds aren’t good for the market,” Ben Westmore, a minerals and energy economist told Regal Group International sources. “There just doesn’t seem to be the demand around at the moment. The major industries that use oil intensely in the U.S. are still sluggish.”

Market specialists predicted that supplies would contract as a result of the damaged Enbridge Energy pipeline between Canada and the U.S. Midwest which was shut down for a shorter than expected 8 days. News of the leak saw oil prices spike on speculation that refineries in the Midwest would need to divert supply from Oklahoma.



“A shortfall in U.S. supply from Canada after a major pipeline closure was more than met by rising imports in other regions,” a note from Australia & New Zealand Banking Group available to Regal Group International sources said.
Imports of crude increased 295,000 barrels a day to 9.3 million and overseas transfer of fuel products increased 11% to 2.5 million barrels a day according to information supplied by the Energy Department.

According to Regal Group International research, the U.S. domestic oil product inventories have reached the 768.1 million barrel level recently which is believed to be their highest level since 1990.

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