With enough speculations and prayers, oil this week had but one trend, to fall. The end of the week saw fear of another US recession on its way, taking the oil to about 4 percent lower, for the last week. Nevertheless Benchmark Crude maintained its last year’s lowest point of $71.63 a barrel last August. Benchmark West Texas International crude for delivery this September fell by 12 percent and finished at $82.26 a barrel on the Mercantile Exchange New York.
Since April, this trend is persistent, and might offer some respite at the gas pumps, disregarding other factors however. Apprehending an uncertain global economy, stocks for major indexes also plummeted by more than 1 percent.
The dwindling Crude got a partner on Friday with dollar weakening further and creating a new record against the Japanese Yen since World War II. A weak dollar will however make it easier for traders to buy commodities and oil, since all of them are priced in dollars.
The current trend of the commodities markets, especially oil, has instigated speculations that the year 2012 will experience a tighter oil supply. The IEA’s announcement in June to release strategic oil reserves to the markets, such a measure however is typical in times of crisis or in the times of war.
A report by the Goldman Sachs Group Inc. points to seriously “tight supplies” in the year 2012, and laments on the fact that not much can be done about this, because increasing production from countries like Saudi Arabia also seems rather difficult.
The world population is rising every minute, and thus a simple fact that comes to most minds and foreseen by a UN report earlier this year is: higher demands, but sadly supplies would go on dwindling further.
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