Fundamental Analysis For Energy Market

Written by ecPulse.com

Yesterday, oil prices gained as still investors were optimistic from the decline in U.S. stockpiles which meant that demand is strong despite the recession they are witnessing. The U.S. economy is the biggest oil consumer in the world, which is why investors eye the nation carefully and its economic data. The contract gained $0.34 closing at $71.37 while recording a high of $71.75 per barrel and a low of $70.22 per barrel.As the global stock markets rose yesterday helped oil prices extend their incline since when stock markets rise means a future increased company production therefore higher demand on oil. Now looking at oil shares we see that Exxon Mobil rose 0.02 points or 0.03% to 71.44 points, ConocoPhillips climbed 0.28 points or 0.66% to 42.81 points while Chevron Corp. fell 0.40 points or 0.58% to 68.43 points.

Reminding you dear reader of the EIA report that was released Wednesday, we see that the U.S. commercial crude oil inventories decreased by 3.9 million barrels from the previous week. At 357.7 million barrels, U.S. crude oil inventories are above the upper boundary of the average range for this time of year. Total motor gasoline inventories increased by 3.4 million barrels last week, and are below the lower limit of the average range. Finished gasoline inventories fell last week while gasoline blending components increased during this same time. Distillate fuel inventories increased by 0.3 million barrels, and are above the upper boundary of the average range for this time of year.Black gold market prices extend their incline as there are worries in the market that the stimulus plans introduced by governments, will trigger inflation in the long run therefore meaning that investors enter the oil markets as a hedge against inflation as they look for a potential in profits by the end of this year. Today, the markets opened at $71.35 while recording a high of $71.75 barrel and a low of $71.33 per barrel.

The markets are volatile lately as a result of investors being confused of what direction prices are taking since on the short run they might rise yet on the long run they are still pressured from the global recession which means that demand is weak.