Current Oil Prices Post a Continuous Fall

The current oil prices reflect a continuous drop in the midst of careful investor sentiment and worries regarding the condition of the world economy.

On the ICE Futures Exchange of London, Brent for delivery in December was lower by 0.9 percent, or 93 cents, with  a crude price per barrel $108.08.

On the New York Mercantile Exchange, the U.S. benchmark for delivery in December shed 0.8 percent, or 71 cents, to a current oil price of $84.86 a barrel.

The weak global economy may possibly lower crude demand next year, said the International Energy Agency (IEA) in its recently released monthly report. Specifically, the report said that a weak economic background keeps restraining the growth of oil demand throughout the whole forecast.

Saxo Bank’s commodity strategy head, Mr. Ole Hansen, said that Brent is expected to stay within the crude price per barrel range of $105 and $110 as worries regarding the “fiscal cliff” in the United States restrain it. Until a deal of some kind is reached, the market will continue to trade on the careful side, said Hansen.

More uncertainty is being faced by the Eurozone because of another delay in the global finance ministers’ decision whether or not to release the latest bailout fund for Greece amounting to 31.5 billion euro or $40.1 billion.

The euro weakened versus the dollar, leading the dollar-priced crude to be less appealing to those holding other currencies aside from those in the United States. In New York, the euro was recently trading from $1.2710 to $1.2681.

The gasoil contract on the ICE market for delivery in December was lower by 1.2 percent, or $11.50, at $925.25 a metric ton. On the NYMEX, gasoline for delivery in December was lower by 278 points, or 1 percent, to $2.6485 a gallon.

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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