The slide in oil prices continues

Oil prices have fallen again - on the Nymex, light sweet crude for December delivery dipped to US$53.6, and Brent North Sea crude for delivery in January dipped to US$51.7. Oil futures' four-session loss totaled to almost 8%, natural-gas futures settled 3.5% higher, and heating oil rose as 2% as colder weather in certain parts stirred demand. Petroleum deliveries, an indication of demand, dropped 5% from January through October - their largest decline since the early 1980s, according to a monthly report from the American Petroleum Institute. Total domestic deliveries averaged 19.6 million bpd in the January-to-October period, marking the lowest level for the period since 2000 as per the API. A report by Energy Information has stated that US supplies of crude climbed last week, but distillates stockpiles fell unexpectedly. The market is currently witnessing a conflict between fundamentals, with present as well as future OPEC cuts likely to bring the market into balance, and the reluctance of investors to put money into anything, including oil futures and commodity indexes. Experts estimate that eventually OPEC will emerge victorious, getting prices back to hover around US$60-70. Deutsche Bank said crude-oil prices could fall to $40 by April as demand falls and production becomes more cost-effective. As per the Deutsche Bank, OPEC potentially needs to cut production by 2.5 mln bpd to reduce supplies, but cartel members also have incentives not to cut output because their revenues are falling from lower oil prices. In the short run, lower prices could prevail as the higher prices for 2008 have altered consumers' behavior and economic uncertainties have increasingly dampened demand.
  More News  Post Your Comment

Previous News

Next News

{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha