Despite the fact that oil prices have fallen by falling about 13% since the beginning of May, they are perceived as high by the IEA. The IEA considers prices to be high enough to be a threat to global economic recovery as petroleum products still constitute a large share of household and business expenditure. The agency warned of an urgent need for refineries to ramp up production of gasoline which in turn could lower prices.
A positive news from USA is a report by the Labor Department that the number of people applying for unemployment benefits fell sharply for the second straight week. However, oil prices have been dampened by dull economic news - The Philadelphia Federal Reserve reported that its measure of manufacturing activity slumped to the lowest reading since October. The National Association of Realtors reported that housing market remains weak as fewer people purchased previously occupied homes in April.