2014.06.0302:47:30UTC+00Stockpile concerns rattle WTI prices

After rising for the first time in 3 months with an increase in value of 3% in May, WTI  prices on the New York Mercantile Exchange grew shaky on preliminary stockpile numbers.

Just several weeks ago on April 25, US stockpiles were reported to be at an all time record high since 1982 at 399.4 million barrels. By the end of May last week, estimates of analysts say that nationwide stockpiles probably had 392 million barrels remaining. According to the Energy Department’s Energy Information Agency (EIA), the US’s largest hub for the storage of oil in Cushing, Oklahoma alone, had its supplies dwindle to its fewest since November 2008 of 21.7 million barrels as of May 23.

The EIA is expected to release their official evaluation of stockpile levels tomorrow.

In the meantime, July contracts for a barrel of WTI alternated between gains and losses rising by 7 cents to $102.54 early afternoon Tuesday. Yesterday’s close of $102.47 was its lowest since May 20.

A barrel of Brent on London’s ICE Futures Europe exchange, meanwhile, was at $108.92. The European counterpart to the WTI had a premium of $6.38 over the latter after yesterday’s difference of $6.36. Further losses are forecast for the North Sea oil as it has broken through support levels based on 200 day moving averages per barrel of approximately $109.

Other factors affecting the fluctuations in the value of oil is the entry of new Libyan Prime Minister Ahmed Maiteg and his objective to restore peace in the region which is among the 12 members of the Organization of Petroleum Exporting Countries as the smallest producer partly due to local unrest.

China’s economy and whether it can stage a resurgence starting this quarter  is also playing a role as the country and its economy is responsible for 11% of the world’s oil demands. Initial reports from an expanding manufacturing sector suggest that the world’s second largest economy is set to bounce back in the next several months.