Oil prices fall by over US$1 as explosions rock London

22-Jul-05

Four explosions that rocked London yesterday, have raised concerns about a possible slowdown in travel, have triggered oil prices to fall by US$1. This weeks US government report on petroleum supplies has eased supply concerns. Economic implications of China's decision to strengthen its currency, the yuan, by about 2%, are awaited. A combination of these factors has pushed prices down. Light, sweet crude for September fell to US$57.13 a barrel on the New York Mercantile Exchange, September Brent futures on London's International Petroleum Exchange fell to US$55.72 a barrel. A section of experts believe that the revaluation of the yuan will make it slightly cheaper for China to buy oil and could therefore increase demand, whereas others are of the opinion that China's decision would not have much influence on oil market fundamental as China's currency revaluation, could slacken oil demand because, by making Chinese goods more expensive, it may cool off the country's economy.