AHMEDABAD (Commodity Online): Nymex Crude Oil prices have gained almost 8 percent on a year-to-date basis but prices on the MCX have increased more than that in the international markets by a whopping 21 percent. Gains in the domestic markets are higher on account of Rupee depreciation; year-to-date the currency has weakened almost 14 percent, thus supporting prices in India.
During the first-half of the year, Nymex crude oil prices rose more than 4 percent as geo-political concerns in the Middle East and North Africa region supported prices.
According to the Economic Intelligence Unit (EIU), the pace ofslowdown in US oil consumption gained momentum during the third-quarter of 2011 on the back of weakness in petrol consumption. With high crude oil prices currently, and slow pace of economic growth in the US, demand growth for the fourth-quarter could be sluggish. Consumption in China is witnessing deceleration as growth is down from a rise of 10.4 percent year-on-year in the first-quarter to just 5.8 percent in August. Moderation in economicgrowth and industrial activity has affected demand growth.
The International Energy Agency (IEA) indicated that oil product demand in the European region which fell by almost 4 percent year-on-year in July, has recovered around 0.3 percent in August.
According to the US Energy Information Administration (EIA) expectations for crude oil prices from the long term perspective continues to remain upbeat. The EIA said that despite economic worries oil prices are expected to remain high. In its International Energy Outlook, the EIA forecasted world crude oil prices at $95/bbl in 2015, $108/bbl in 2020 and $125/bbl by 2035.
Organization of Petroleum Exporting Countries (OPEC) noted that economic recovery remains "very fragile" and said that there is still further chance of another recession. OPEC's oil price forecast for this decade would be in range of $85-$95 a barrel. Oil prices have generally stayed high in the recent months despite rising European economic uncertainty.
