Last Monday, sluggish demand from big oil consumers pushed the price of crude for November delivery to a low of $82.75 per barrel. However, since then it managed to recoup the losses, reaching a high of $87.42 on Friday. Further during the latter half of the week, prices were slipping below the $84 mark, after the Energy Information Administration (EIA) reported an unexpected increase in crude inventory.
On Thursday, the EIA reported an increase of 1.3 million barrels of crude for the week ended October 7, pushing the price lower.
Little comfort was provided by the U.S. labour department reporting initial jobless claims fell by 1000 last week. Market players continue to follow U.S. employment levels as the correlation of economic activity and employment levels in the world’s biggest oil consumer remains high. Slovakia’s approval of expanding the bailout in the Euro zone also delivered slight respite.
Last week crude closed 5.14% higher after declining by almost 1.8% the week prior. Friday’s unexpected increase (1.1%) in U.S. retail sales also helped the commodity rally, pushing it to a three week high. A report out of China concerning slowing crude consumption also held back the rise. This slowing could raise doubts about China’s future demand for oil and analysts could expect growth to slow in the last quarter of the year, possibly pulling the price lower.[mpoverlay][/mpoverlay]
