West Texas Intermediate dropped to a one-week low today, because of forecasts that U.S. supplies climbed to the highest since 1931. The IEA announced that the U.S. oil production will be higher than the volume, demanded by the dynamically developing countries.
Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark explains: “Supply-demand is skewed to the oversupply side. There is currently a lot of spare capacity and global crude overproduction. The multi-decade high in U.S. supply will keep weighing on WTI.”
Lowered oil costs led to decrease of the U.S. import prices in April by 0,5%, which is a positive sign for the household finances. American households feel less inflation pressure as import prices have fallen 2.6% for the last 12 months. The tame inflation will allow the FED to continue with its Quantitative Easing policy as it keeps trying to nurse the labor market back to health. The United States imports a lot of the fuel it consumes and last month imported petroleum prices fell by 1,9%.