Oil u-turns on Nymex

22/07/2009

Crude oil prices fell during electronic trading on the New York Mercantile Exchange (Nymex) this morning (July 22nd), putting an end to a five-day rally.

By 05:32 Eastern Time, the September delivery contract had fallen to $64.55 (£39.46) a barrel, down $1.06 on the settle price at the close of trading yesterday, when the August delivery contract expired.

The slump was broadly attributed to the reaction to data from the American Petroleum Institute showing that US oil stockpiles rose last week for the first time since April.

Speaking to Bloomberg, Tetsu Emori, a commodity fund manager at Astmax in Tokyo, said: "Inventories should be going down because this is the demand season for the US. Instead, the inventories are up. This implies that the demand isn't as strong as expected."

Gasoline prices are usually subject to strong seasonal variations during the summer months as the US driving season gets underway. Conversely, heating oil prices tend to move upwards in the winter months as temperatures fall.