Oil Is Little Changed After Falling on Signs Rally Unjustified
By Mark Shenk (www.bloomberg.com)
May 23 (Bloomberg) -- Crude oil was little changed after the biggest one-day drop in three weeks on signs that a 15 percent increase in prices this month isn't justified by stockpiles and demand.
Consumption averaged 20.3 million barrels a day in the past four weeks, down 1.3 percent from a year earlier, the Energy Department said May 21. Prices climbed above $135 a barrel yesterday as OPEC ministers said they could do nothing to prevent higher prices because they are pumping at capacity.
``The fundamentals justify a price between $80 and $100,'' said Sarah Emerson, managing director of Energy Security Analysis Inc., a consulting firm in Wakefield, Massachusetts. ``The run-up in prices has more to do with institutional investors coming into the market. There's nothing to discourage them from doing so because the returns have been so high.''
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