Speculations that global economic growth could slow and curb fuel demand amid rising supplies, has caused volatile oil prices to continue to weaken. Oil is headed towards the biggest quarterly drop since 2008. Crude on the Nymex for November fell to US$79.6, after plunging over three dollars to US$81.2 on the previous day. This quarter, oil prices have dropped 16% since the end of June, the biggest quarterly loss since Q4-2008. Brent fell to US$103.3 on the ICE Futures Europe exchange.
Global demand is expected to slow down due to an estimated slowdown in economic growth in China, the fiscal crisis in Europe and deteriorating demand in USA. Crude inventories climbed for the first time in four weeks in USA. On the supply side, OPEC production capacity is estimated to rise to almost 800,000 bpd in 2012, led by the resumption of Libyan fields.