Oil prices dip below $90 as consumer demand falters

A supply report issued Wednesday showed a severe dip in consumer demand for crude oil in the United States. The report has prompted a drop in crude oil prices, which currently stands at just below $90 a barrel.

The Wednesday afternoon report from Europe also indicated a drop for the product from $90.21 to $89.57 in just 24 hours. The report was brought in by the New York Mercantile Exchange.

However, London figures seem to be showing signs of improvement, as Brent crude oil prices have risen 40 cents to settle at just over $112. Analysts from Sucden Research have released a statement saying that the uphill impetus that Brent seems to be undergoing promises them great traction in the European markets, while their competitors, such as Nymex commodities are expected to take a hit.

The crude oil market has proven to be highly volatile in the past months, and much has been made by financial analysts in terms of playing the field adequately. Despite mounting worries over Europe’s critical debt situation and investors getting cold feet, Tuesday reports showed the largest increase in oil prices in a month. However, that spike is expected to take a downturn if crude prices fail to make the $90 mark.

Tropical storms have also contributed to the market’s volatility, as crude mining operations had to be put on hold due to Tropical Storm Lee, triggering a several million barrel drop in inventory.

Nevertheless, both distillates and gasoline inventories are on a rise, according to the latest reports.

Nymex has also issued an October report that shows a 0.5 cent increase in heating oil prices, as well as a 0.51 cent dip in gasoline. Natural gas has been on a slow, but steady rise lately, recording a 0.1 cent increase for the month of October.