On August 25, 2011: U.S supply report gave mixed signs about the demand for crude oil after this report oil prices hovered above $85 a barrel in Asian market. There is an extreme fluctuation in oil prices over the last few months.
US economy slowed sharply in the first three months of the year as high gas prices cut into consumers spending. Inventories of gasoline jumped 6.4 million barrels last week and distillates rose 2.0 million barrels. Prices have fallen from near $115 in May. BNP Paribas said in his report that the market has gone through a shift with the emergence of talk of double dip recession.
A major reason for the slump in oil prices is the economic austerity measures adopted by European countries. Oil has fallen recently along with stocks because of concern about the global economy. France gets 2.5% of its global production from Libya, is seen as a particular threat due to France leading role in international community to the rebel cause.
World economic growth has been revised down to 3.7% in 2011 to 4.0% in 2012.this was mainly due to revision in the US forecast, which was cut to 1.8% from 2.5% in 2011 and 2.3% from 2.9% in 2012.
Product market sentiment showed a moderate recovery last month, with product cracks moving upwards across the globe supported by stronger Latin American import requirement. Gasoline demand has been weaker then expected in the Atlantic basin. Economies’ worries have affected the oil demand in the US; the aggregate oil demand will see a further decline this year.
Markets continue to monitor developments in Libya in order to asses how quickly oil production in the country would return to pre-war levels.
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