ST: Crude Oil Prices Close to Flat Following Three Days of Decline
Crude oil prices were generally flat yesterday, after three consecutive sessions of declining prices per barrel. Crude oil for May delivery went up just a penny to $88.72 a barrel after dipping down to as low as $87 a barrel during the trading day. Brent crude oil for June delivery, on the other hand, moved down 72 cents (0.7 percent) to $99.91, marking yet another decline after prices dropped 2.3 percent in Monday trading. This is the first time Brent crude has closed below the $100 mark since July 2012.
According to Global Hunter Securities strategist Richard Hastings, the price of Brent crude dropping below $100 would be akin to a “revision in how the global markets are thinking about fuels and total world demand, not only today, but over the next two years, and longer.” Hastings forecasts that global merchandise trade growth may continue to “decelerate” going forward, citing World Trade Organization statistics.
Another financial expert, Capital Economics head of commodities research Julian Jessop, believes that over the coming years, Brent crude oil may only peak at $100, and would likely close 2013 below the crucial threshold.
In the light of factors such as slower-than-expected economic growth in China, both the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency have revised their growth forecasts for global oil demand to reflect more conservative figures. In the United States, inventory of crude oil is expected to increase further, while gasoline and distillate stockpiles are forecasted to go down for the most recently concluded week.
