Crude prices fall tad lower to US$78/barrel due to ailing demand

15-Oct-08

Global markets pushed a bit higher this week as United States and European economies announced plans to inject trillions of dollars into weakening finance companies. However, the story on Wednesday was a bit different as the panic of deepening global economic crisis dominated the finance rescue schemes announced. US crude dipped to US$78.10/barrel by 0152 GMT, while London Brent crude decreased to US$74.30/barrel. On Tuesday, crude prices mounted by US$3/barrel in one trading session. The information regarding a September decline of 600,000 bpd in OPEC's seaborne oil exports (except for Angola and Ecuador) gave some support to the oil prices. Further, US National Hurricane Center said Tropical Storm Omar, which earlier had disrupted activity at Venezuela's 200,000 bpd Puerto La Cruz refinery, was predicted to turn into hurricane in the Caribbean Sea as early as Tuesday night. Traders are expected to focus their eyeballs on weekly US inventory data on Thursday, with analysts calling for a 1.9 million barrel build in crude stocks. Crude oil prices have recently seen drastic decline after they hit US$147/barrel in July mainly due to lower demand from developed nations including US and the recent global financial melt down.