Oil Prices Drop Slightly
The current oil price slightly fell following predictions of reduced global crude demand and a continued rise in U.S. crude supplies.
In early afternoon NYMEX trading, the U.S. benchmark for delivery in May was 23 cents lower to a crude price per barrel of $94.41. The contract ended 44 cents higher during the previous trading day.
The International Energy Agency reduced its forecast for this year’s global crude demand. The cut was 45,000 barrels daily to 90.6 million bpd, a rate that is higher by 795,000 barrels per day compared to last year.
A poor macroeconomic atmosphere is anticipated to keep the growth in demand quite limited for the rest of the year, according to the IEA.
Its forecasts repeated the ones made by OPEC, the organization which consists of the primary crude exporters of the world.
While the price of oil has recently eased, the IEA noted some factors that may risk supplies and strengthen prices. These factors consist of: extreme weather in some parts of the globe, geopolitical risks, such as unrest in Syria and conflict over the nuclear program of Iran, and concerns of safety in major crude producing nations like Nigeria and Libya.
The prices of oil were also hampered by proof that the crude stockpiles of the U.S. are increasing. The Energy Department of the U.S. recently said that weekly inventories increased by 300,000 barrels to 388.9 million barrels. That is the highest level of the country’s crude inventory in almost two decades.
Oil obtained several support from a weaker U.S. currency, which makes oil cheaper for traders holding other currencies. The euro was recently up from $1.3069 to $1.3119.
On London’s ICE Futures Exchange, Brent was 1 cent lower to $105.78 per barrel.
In other NYMEX trading, wholesale gasoline gained 0.99 cent to a price of $2.875 a gallon. Natural gas increased 1.1 cents to a price of $4.096 per thousand cubic feet. Heating oil shed 0.62 cent to a price of $2.9417 a gallon.