On September 19, 2011, Oil fell to a week’s low on speculations that the US oil demands might falter owing to the slow movement of the economic growth. The US is one of the world’s leading consumers of oil. The fall was also an outcome of the European debt crisis taking a bad turn, thus causing a widening of the Brent oil’s Premium, towards US futures.
There was also a 1.5% decline in the Futures, a result of the US finance minister’s decision not to use measures to stimulate the economy. A data from the Government revealed that the home sales were stagnant and construction figures fell during last month. The US’s fuel usage too shrunk by 3.8%. Oil also declined owing to the failure to breach the moving average of 50 day.
The only thing that is concerning analysts world over is the direction of US trend to use fuel and other petroleum products. Considering such issues with unconfirmed facts, oil prices will continue to be weak, said analysts of Fat Prophets in Sydney. However Europe will continue to be a pessimistic vista for crude markets for some time to come.
Oil for delivery of October as well witnessed a fall and was at $86.65 in the electronic trading on the New York Mercantile Exchange. Brent crude for November’s settlement too declined by 82 cents, in the ICE Futures Europe Exchange, London.
This decline overall is a result of the doubt and apprehensions associated with the US economic moves and the consumer trends in oil demands. The rising concern over the Europe debt crisis is yet another major take off for the fluctuations oil prices the world over. Investors have a tendency to sell off contracts when they foresee a stall in the price advances, much below the technical level.
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