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The week started with oil trading at around $69 a barrel on periodic concern that the global recovery was running out of steam. This was helped by a forecast that the demand for gasoline would drop in the US and Europe over the next 10 years as more efficient autos become the norm and emissions controls are implemented. On Wednesday, however, the market’s mood shifted when the US stockpile data showed US crude inventories dropped by 4.7 million barrels vs. a 2.5 million barrel analyst forecast and an American Petroleum Institute report the night before showing that inventories had actually risen by 600,000 barrels the previous week. Much of the drop was caused by reduced crude imports as refiners cut back on production amid weak gasoline sales.

Little in the underlying fundamentals of the oil markets has changed since early summer, leaving oil trading in the vicinity of $70 a barrel. “Green shoots” and government bailouts in America, coupled with reports that China is leading a world recovery, continue to balance weak employment and real estate numbers in the US.

Natural gas prices moved higher last week closing on Friday at $3.76 per million BTUs despite record storage levels and several weeks to go before winter heating gets going. After reaching a 7-year low of $2.41 on September 4th, natural gas has now risen 56 percent in only nine trading sessions.