Crude Oil Price Falls

Posted by Rob

February 5, 2008

Data figures released in the US showed a slow-down in the US service industry for January.

The result of weak US service sector figures suggests a slow-down in the US economy as well as a reduction in energy demands.

Crude oil fell over $1 a barrel after the report was released. James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois said, “when you see any indication of further economic slowing, there is a possibility that demand for petroleum will also be slowed.” - Bloomberg

Figures released tomorrow are expected to show oil inventory gains of 2.2 million barrels last week as refinning rates dropped to a 22-month low.

Brent crude futures also fell 1.7 percent to $88.97 on the London ICE Futures Europe exchange. Brent reached a record $98.50 on January 3.

OPEC left oil target pries unchanged on the prospect of global slowing demand and an increase in stockpile inventories.

A Look At The Chart

The daily chart for light crude shows a double top formation after a long up-trend. This technical pattern is a key indication of a reversal.

It will be worth watching for key announcements affecting the USD in the coming week, as well as energy demands in the Euro-zone which could affect the price of crude oil further.

[top]