Oil futures are down by almost US$4 a barrel since the intraday high of US$57.60 on 17 March. Oil prices dropped by over US$2 yesterday, triggered by rising crude supplies in the United States, a strengthening dollar and signs indicating a limit to China's growing energy needs. Other contributing factors were rising interest rates, which could slow economic growth and energy demand.
Light, sweet crude fell to US$53.81 per barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery settled at US$53.04, on the International Petroleum Exchange. Oil is almost 45% more expensive than last year but still well below the inflation-adjusted peak above US$90 a barrel set in 1980.
The rise in U.S. oil supplies coincided with evidence that the growth in oil demand in China may be slowing. In China, demand was up 15% in November, but growth slid to only 3% last month. In China, India, Thailand and Indonesia, rising domestic energy prices were dampening demand.A weak dollar also has factored into this year's price surge, so the strengthening of the U.S. currency this week has been having the opposite effect on the value of oil and other commodities.