Concerns over wavering crude demand, weak recovery global economy knock down prices to US$71

28-Aug-09

The Energy Department in USA reported that crude stockpiles rose by 200,000 barrels for the week ended Aug. 21. As the fresh report showing a rise in crude supplies in USA hit the markets indicating wavering crude oil demand amid concerns of weak global economic recovery, oil prices have tanked. Benchmark crude for October delivery dipped to US$71.10 by midday in Singapore in electronic trading on the NYMEX. Last week’s report showed a large and unexpected draw on oil, which sent prices soaring. Investors are cashing out as the latest US data indicates bearish fundamentals in the oil market. Analysts opine that global oil demand could decline over the longer term given anemic economic growth and high oil prices.