News Column

Crude Oil Yo-Yos Around USD97 On Demand Concerns

August 18, 2014

WASHINGTON (Alliance News) - Crude oil prices are notably lower Monday morning, weighed down by reports that global demand for oil is likely to decline.

Last week's weak economic data from the eurozone, an unexpected increase in US crude oil stockpiles and the resumption of supplies from Libya are also contributing to oil's decline.

Although an end to the tensions between Russia and the West are not in sight yet, reports that Russian convoys will be allowed to carry humanitarian aid to eastern Ukraine have helped ease concerns a bit.

Traders are also watching the developments in Iraq and Israel where unrest continues.

Crude futures for September delivery are down USD0.96 or 0.99% at USD96.39 a barrel.

On Friday, crude oil futures ended sharply higher at USD97.35 a barrel, gaining USD1.77 or 1.8%, bouncing back on reports of escalating tensions between Russia and Ukraine. Some short-covering after Thursday's sharp plunge too contributed to oil's upmove. For the week, oil shed 0.3%.

Meanwhile, natural gas for September is down USD0.017 or 0.44% at USD3.760 per million btu.

Libya's exports are getting back online with the re-opening of its largest port, Es Sider, which was closed for nearly a year. Earlier last week, oil cargo was loaded from Libya's third largest port, Ras Lanuf, for the first time in almost a year.

Among the key economic events this week, are the release of data on new home and existing home sales in July, the minutes of the Federal Open Market Committee's July meeting and the report on weekly jobless claims.

The Philadelphia Federal Reserve's manufacturing survey for August, flash estimate of Markit's manufacturing survey for August, consumer price inflation report for July and the Conference Board's economic indicators are also eyed this week.

At 10 am ET, the National Association of Home Builders is scheduled to release the results of its homebuilder confidence survey for August. Economists expect the housing market index for the survey to remain unchanged at 53.

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Source: Alliance News

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