Crude Oil and Metal Commodities Prices Dip Amid Declining Demand
Due to the mounting debt crisis in Europe and limited growth predicted for the Asian Development Bank, demand on raw materials, such as crude oil and metals has dwindled significantly.
Chancellor of Germany Angela Merkel is scheduled to hold a meeting with the Greek Prime Minister Papanderou and President of France Sarkozy to discuss the increasingly worrisome economic downturn in Europe, as well as the drastically deteriorated state of Greece’s economy. There is concern floating about amid Europe, the U.S. and China of Greece defaulting on its debt, and the conference is largely being held in order to appease the fears.
Recent analytical studies have shown that raw material commodities have taken a 0.8% fall, with crude oil prices dipping $1.54 (1.7%), now standing at $88.67 per barrel. On the metal side, copper’s numbers have also seen a decrease of 1.7%, settling the product at $3.90 per pound.
The lingering effects of the recession, compounded by the fears of a second coming have driven plenty of investors away from the oil and metal commodities. Inflation rates in both Europe and the U.S. are up almost 6%. This problem is further entrenched by China, the world’s number one copper and energy consumer increasing interest rates thrice in the past year, in order to abate soaring prices.
The inflows of crude oil and metal ETF’s have been significantly weakened by the faltering economy.
China’s Premier has recently put out a statement rallying developed countries to minimize their outrageous deficits and bolster the economy with more jobs. He added that while China would be there to cushion the fall for its European trading partners, it would certainly be more preferable for the region to provide a more long-term solution to its economic woes rather than rely on his country’s aid.
According to the International Energy Agency, global crude oil consumption will likely decrease by 400,000 barrels per day in the coming year, with international demand rising 1.2%.
Global figures will also be altered significantly by Libya’s return to the trading market after Qaddafi displacement. The nation’s return into the crude oil game is promising to be long and arduous.