Crude Oil Floats on Weak U.S Economy and Strong Dollar
Posted on 30. Jan, 2009 by admin in Crude Oil
The Crude Oil prices failed to strengthen on Thursday, due to the release of another round of gloomy U.S. economic data, the world’s top energy consumer. The failure of Oil to reverse recent losses was also owed to a strong U.S. Dollar in yesterday’s trading. This came about largely due to reports showing U.S. unemployment rose to a record peak in mid-January, while new orders for long-lasting manufactured goods fell for a 5th month. The deepening U.S. economic recession has cut demand for fuel and contributed to the biggest 4-month buildup in U.S. crude stockpiles since 1990. Prices for Crude has dropped more than $100 since its peak last summer, ringing alarm bells for the Organization of Petroleum Exporting Countries (OPEC) nations dependent on Oil revenues. This has resulted in OPEC cutting output by 4.2 million barrels per day since September.
Crude Oil prices, however, were little changed yesterday, after settling at $41.56 a barrel. This was largely due to the fact that OPEC Secretary General Abdullah al-Badri said that the group would not hesitate to act again if the Oil price remained low, when speaking at the World Economic Forum in Davos, Switzerland. Oil producing nations are foresee that Oil will add to this weeks losses by the end of next weeks trading, as Thursday saw a potential U.S. Oil refiner strike and traders are speculating that a potential strike could affect supplies of refined products.
