Crude oil prices fell to a near three-month low on Tuesday following a sharp downturn on Monday due to diminishing demand and a worsening outlook surrounding the Euro-zone crisis.
Brent crude oil dipped below $112 today, the fifth consecutive day of losses, down six percent.
Growing concern over signs of a global economic slowdown throughout much of Europe and the U.S. is driving down prices of crude oil, which fell $1.37 to a low of $96.57 a barrel after trading as low as $95.35 in New York on Monday.
The stunted growth of the U.S. economy mixed with weak fuel demand has analysts doubting its ability to maintain growth levels amid fluctuating energy prices, predicting weak mid- and longterm growth prospects.
But despite a grim status report of current economic conditions, the sharp downturn in oil prices is good news for U.S. consumers, likely to be met with an increase in consumer spending.
While demand slows, fuel supply levels are rising with increases from Iraq, Libya, and the U.S., according to J.P. Morgan oil analyst, Lawrence Eagles.
Prior to the release of the U.S. Energy Department report, a Bloomberg News survey reported U.S. inventories reached a 21-year high last week at 377.8 million barrels.
After closing at a three-month low yesterday, Saudi Arabia’s Oil Minister Ali al-Naimi said international crude prices are “still a little bit high” at a board meeting in Tokyo earlier today. The world’s biggest crude exporter is storing close to 80 million barrels with 2.5 million barrels a day of spare capacity, and is pumping out 10 million barrels a day – nearly the fastest rate of production in over 30 years. Well, good for you, Saudi Arabia.
That’s all for now,