Crude Oil prices broke above US$72 a barrel Wednesday after a US government report showed a bigger than expected decline in Crude Oil inventories. NYMEX crude rose US$1.58 to settle at US$72.51bbl, adding to Tuesday’s gain of UD$2.07, while ICE Brent rose US$1.81 to US$71.67.The gain came after the US Energy Information Administration reported that commercial crude oil inventories dipped last week by 4.7 million barrels, against expectations of a 2.4-million-barrel drop. The decline, pegged to a slowdown in imports, came alongside builds in gasoline and distillate stocks, a combination that analysts said could hurt the profitability of US oil refiners. Other commodities and equities also rose strongly Wednesday, inspired by a comment from US Federal Reserve Chairman Ben Bernanke that an economic recovery had begun, a signal demand for raw materials will rebound. The US Commerce Department said retail sales climbed 2.7 percent in August after declining 0.2% in July. It was the biggest monthly advance since January 2006 and well above expectations on Wall Street for a 2% increase. Crude Oil also got a boost from weakness in the US$, which hit a 1 year low against a basket of currencies as investors turned to riskier assets. A weaker USD can also fuel purchases of Crude Oil and other dollar-denominated commodities, as they become relatively less expensive to non-$ holding investors. An OPEC delegate wrote in a Kuwaiti newspaper Wednesday that the Organization of the Petroleum Exporting Countries might need to cut its Crude Oil supply next year to match an expected fall in demand for the group’s Crude Oil.
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