Crude Oil Falls As Supply Outstrips Demand
Last week saw crude oil rise from a low of 90.06 on Monday to a high of 94.03 on Tuesday. It then fell gradually throughout the week and on Saturday was at 91.70.
Crude oil futures fell on Friday due to a stronger US Dollar and concerns that there is currently an excess supply of oil. A strong dollar always makes dollar based assets fall, mainly due to investors holding other currencies. Furthermore, Europe and China’s energy markets have been affected due to slow economies and this is having an effect on the demand for oil.
The US Energy Information Administration’s weekly report showed that US crude oil inventories increased by 3.7 million barrels in the week ending September 12th. It was expected that a fall in stocks would be reported; as a result it is likely that crude oil will continue falling over the next few days.