Supply concerns, estimates of US data and a weaker dollar support oil prices above US$132. Light, sweet crude for July delivery rose in Singapore past US$132 a barrel in electronic trade on the New York Mercantile Exchange.
Implications the U.S. consumer confidence, new home sales, gross domestic product and other economic data might have on the dollar and oil prices will be closely watched by investors. If these parameters weaken, the dollar will get pushed down further. Oil and other hard commodities are seen as hedges against a weakening dollar and inflation. A weak dollar also makes petroleum products less expensive to Asian and European buyers.
The International Energy Agency; the energy watchdog for the most industrialized nations, is in the process of lowering its forecast for long-term global oil supply. Global diesel supplies are projected to get squeezed as demand in China surges, as China's top economic planning agency urged oil and power companies to ensure sufficient supplies for earthquake-hit areas and for the Beijing Olympic Games in August.
Global crude oil market dynamics seemed to have changed. Normally, poor economic data from the US, the world's largest oil consumer, implied a fall in demand and prices. Now it seems that the fundamental driver will be the non US markets.