Asian Current Crude Oil Price Stays Lower than $98

In Asia, current oil prices stayed lower than $98 per barrel as traders see signs of weakening growth for the economy of Europe and the U.S. This suggests that demand for crude may stay lower than previously expected.

During the midday trading at NYMEX, Benchmark crude for delivery in June was lower by 13 cents at an oil price per barrel of $97.81. The contract further dropped by 55 cents to end at $97.94 a barrel.

In London, Brent crude prices for delivery in June was higher by 10 cents to finish at $113.26 a barrel.

The drop from the most recent crude price of $106 per barrel occurred in the midst of concerns that the West will cut oil usage. According to the latest statement of the United States, factory orders declined in March as the number of jobs added by the economy was lower than what was expected in the month of April. Moreover, Spain said that its economy fell into recession in the previous quarter when the rate of unemployment reached 24%.

The Schork Group said that even if it is easy to criticize the recovery of Europe, the recent set of the United States’ macro-economic data is in itself troubling.

If the current crude oil price drop goes on, the cost of crude products like gasoline will also fall, which will consequently provide a possible increase in consumer spending.

The economy of the United States has shown that it is not capable of keeping levels of growth when energy costs sharply increase; that is why weaker growth is expected in the mid and long term unless the present sell-off goes on, said Schork.

Investors will be keeping a close watch on the most recent data of the United States’ crude supply, which will be released in the coming days. Analysts polled by Platts anticipate the American Petroleum Institute to report a rise in last week’s crude inventories to reach 2.2 million barrels.

J.P. Morgan’s oil analyst, Mr. Lawrence Eagles, said that there has been a general rise in crude supplies with increases from Libya, U.S. and Iraq.

Elsewhere in the energy markets, heating oil was higher by 1 cent at a per gallon price of $2.99. Gasoline futures gained 1.2 cents for 2.99 a gallon. Natural gas increased by 0.2 cents for a price of $2.34 for every 1,000 cubic feet.