An unexpected larger than life increase in US crude supplies pulled down oil in Asia below US4107 on Wednesday. Benchmark oil for May delivery dipped to US$106.7 on the Nymex while Brent crude for May delivery dipped to US$124.9 per barrel in London.
An unexpected rise in US oil supplies indicates that demand remains weak. As per The American Petroleum Institute, crude inventories rose 3.6 mln barrels last week vs analyst prediction of an increase of 2.8 million barrels.
Some analysts forecast weaker economic growth and demand from China, the world's second largest economy, will pull oil prices lower. Capital Economics expects Brent crude to fall to below $100 by the end of the year. Years of sustained double-digit growth in China's economy seems history and the risks over the next several years, both to growth and commodity demand, are estimated to lie overwhelmingly on the downside.