Crude oil futures tested their two-week lows in electronic moves today before edging up but could pare back these miniscule advances in evening moves as European equities linger in red and International Energy Agency (IEA) Lowers Global Oil Demand Estimates On Precarious Economic Environment. The commodity dropped heavily in the last session with the massive gains in the US dollar clubbed with ideas that OPEC is not going to tinker with its production levels hit the prices hard.
Sentiments remained mostly bearish today as commodities eyed the gloomy world economic prospects with the Eurozone debt crisis dragging on. Oil dropped to lows of $97.64 per barrel for the WTI futures before edging up slightly in London moves. The International Energy Agency (IEA) stated today that it has lowered its forecasts for global oil demand for 2011 and 2012 by 160,000 barrels a day and 200,000 barrels a day, respectively, due to the more precarious economic backdrop and weaker fourth-quarter data, according to media reports. Uncertain prospects for the single European currency continue to provide added downside risk to current economic growth estimates, the IEA said in its monthly oil report. The agency now expects global oil demand to average 89.0 million barrels a day in 2011 and 90.3 million barrels a day in 2012
Kuwait's oil minister Mohammad al-Busairy said there's no need to change OPEC's output or production quotas because “the market is stable.” Most members of the Organization of Petroleum Exporting Countries agree there is no need to change production or targets, al-Busairy said yesterday. The 12-nation group meets in Vienna tomorrow.
The Euro extended its downward run to test a two month low against the US dollar in Asian trades today as the plans hatched in the latest EU summit failed to boost investor confidence and doubts persisted about how the policymakers are going to stem Europe's debt crisis. The ratings agencies welcomed the latest EU steps with a lukewarm response, in turn pressurizing the world markets and assisting the US dollar to rally as safe haven demand surged.
MCX Crude oil has gone up though as the Indian rupee tumbled to another fresh low of 53.50 against the US dollar. The benchmark MCX Crude oil futures are quoting at Rs. 5226 per barrel, up Rs. 23 on the day.
