Asian Current Oil Prices Bounces Back from Seven-Month Lows

The current crude oil price in Asia slightly rebounded from its lowest level in seven months to reach $90 a barrel in the midst of indications that the economy of China is slowing down.

The benchmark oil price for delivery in July was higher by 3 cents to reach $90.2 per barrel in midday electronic trading in the NYMEX. The contract dropped by $1.95 cents to end at $89.90, a low not seen since the 21st of October. In London, Brent crude price for delivery in July was higher by 29 cents to finish at $105.85 a barrel.

The crude oil price per barrel has dipped by almost 15% from its rate of $106 three weeks prior. This decline is widely attributed to increasing concerns of investors that the growth of the economy and demand of oil in the United States, China and Europe will be disappointing in 2012.

HSBC Corp. recently said that the Purchasing Managers Index based on a Chinese manufacturers’ poll showed a further weakening of activity in May.

The initial PMI based on 85 out of 90% of responses from companies polled for the entire index, which comes out later, dropped from 49.3 in April to 48.7 according to a scale of 100 points. Numbers lower than 50 shows a contraction.

The cabinet of China recently promised to increase its efforts to strengthen growth following the economy’s expansion of 8.1% in quarter one, the lowest in around three years.

The current political conflict in Greece is alarming to investors who fear that the nation may possibly leave the euro currency which could ignite economic and financial troubles in Europe.

Tightening supplies of crude in the United States have also affected the crude oil price per barrel. The Energy Information Administration of the Energy Department recently said that crude stocks in the previous week increased for the ninth straight week.

Elsewhere in the energy markets, gasoline futures increased by 0.8 cents for a price of $2.81 a gallon. Heating oil was higher by 1 cent to reach $2.83 a gallon. Natural gas dropped by 1.7 cents at $2.72 for every 1,000 cubic feet.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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