Oil prices dropped more than $1 a barrel Thursday

Thursday, October 22, 2020

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Oil prices dropped more than $1 a barrel Thursday as growing crude supplies and signs of slower economic growth led traders to test the $50 mark. Light, sweet crude for the June contract dropped $1.21 to $50.40 a barrel in midday trading on the New York Mercantile Exchange, after falling as low as $49.80 earlier in the day. On Wednesday, oil prices fell $2.59 to $51.61. "Fifty-dollar crude is like Dow 10,000 it's a defense point, for sure," said Tom Kloza, director of Oil Price Information Service in Lakewood, N.J., adding that analysts are split on whether that defense point will hold or give way to lower prices, informs ABC News. According to the Forbes, analysts say a late rally in prices Thursday was sparked by bargain-hunters profiting from falling prices in the last week. Oil prices have been on a downward trend on bearish news in the past week, the most recent being the U.S. Commerce Department's announcement that the U.S. economy grew at a slower-than-expected rate of 3.1 percent in the first quarter. On Wednesday, the U.S. Energy Department said inventories of crude oil in the largest energy-consuming country grew by 5.5 million barrels last week to 324.4 million barrels, or nine per cent above year-ago levels - the 10th time supplies have risen in 11 weeks. U.S. President George W. Bush has also signaled that he would act to reduce crude prices, first when he called on Saudi Arabia's Crown Prince Abdullah Monday to expand production, and on Wednesday he urged using closed military bases as sites for new oil refineries. Daniel Hynes, energy analyst at ANZ Bank in Melbourne, Australia, said that despite the stockpile surplus, he was skeptical that it signified a lasting downward trend in prices

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