August 24, 2011: Market analysts are closely watching the price of crude oil because of the uncertainty associated with it brings frequent fluctuations. American petroleum institute said that crude inventories fell 3.3 million barrels last week. The energy information arm of McGraw hill Cos. had predicted an increase of 2.0 million barrels.
Oil prices rose on Tuesday as traders monitored the crisis in oil rich Libya, with rebels claiming victory and capturing Moamer kadhafi’s heavily fortified compound. Today oil prices hovered above $85 a barrel in Asia after a U.S supply report gave mixed signs about demand for crude.
Banks had lowered their average crude price forecast- to $92 for the third quarter and $98 for the fourth quarter. Lipow said that The European refineries have struggled to make up for the production loss despite an increase from Saudi Arabia. As a result, European market should see the first and most significant drops in oil prices.
As oil is traded in dollars it tends to rise as the greenback weakens and makes crude less expensive for investors holding foreign money. The dollar dropped after the report that manufacturing activity in China and Europe was better than expected.
Benchmark West Texas Intermediate crude, for October delivery witnessed a rise by $1.67% or 2%, to $86.9 per barrel in afternoon trading in New York.
A report by the Goldman Sacs 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
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