High fuel supply pressures the market

High oil supply hits the market, crude oil prices fell. According to news from Dow Jones New York on December 7, crude oil ** fell for a fourth consecutive day on Friday, due to the weakness of the fuel oil market, investors lowered their views on oil demand.

New York time at 14:30 on December 7 (Beijing time at 3:30 on December 8), NYMEX January crude oil fell 33 cents, settled at $ 85.93 a barrel, the lowest since November 15.

ICE January Brent crude oil fell 1 cent to $107.02 a barrel. This week, the decline was nearly 4%.

Both contracts were above the flat early on Friday.

Fuel oil ** fell 1% on Friday. Gasoline plummeted only slightly after a five-day losing streak. Crude oil prices were under pressure as a result of the depletion of the refined oil market.

A government report released earlier this week showed that last week's US gasoline inventories recorded the largest weekly increase in 11 years, including distillate stocks for heating oil and diesel.

Analysts and investors said that the increase in fuel inventories in the United States can be understood as a weaker demand for oil, because the decline in gasoline and heating oil contracts will cause refineries to cut capacity utilization.

The price of oil rose sharply on Friday, as the US Department of Labor announced that the number of non-farm jobs in the United States increased by 146,000 in November, which is inconsistent with expectations that Hurricane Sandy could cause a sharp drop in jobs.

The unemployment rate fell to 7.7% in November, the lowest since December 2008. But when the unemployment rate drops, people give up seeking jobs. This does not bode well for the economy.

However, traders said that the market's kinetic energy quickly declined afterwards. Crude oil contract closed at the low end of the full-day trading range of $85-90. Although the economic growth in the United States improved, the slowdown in China's economic growth and the debt crisis in Europe still worries investors.

Recently, the White House and Parliament’s budget consultations have kept some traders on the sidelines.

Speaker Benner of the House of Representatives stated that he had "no progress at all" in the budget negotiations with the President Obama administration. Both parties are working hard to reach a budget agreement to avoid automatically starting tax increases and reductions next year.

If the economy falls from the "fiscal cliff," some people may say that the U.S. economy will be brought into recession, which may suppress U.S. oil demand.

Another report showed that consumer confidence in the United States fell to the lowest level since August.

OPEC ministers will meet on Wednesday, but analysts expect the organization will not adjust its oil output policy.

Oil traders will also pay attention to China’s economic data to be released on Sunday, which will show that it is driven by the recent favorable economic growth policies. In November, the growth rate of manufacturing output, investment, and retail sales accelerated.

January heating oil fell by 2.79 cents to 2.9153 dollars per gallon.

RBOB gasoline prices in the month of January rose by 0.05 cents to US$2.5974 per gallon.