MUMBAI: Global Crude oil prices have declined steadily despite OPEC hinting at further production cuts.Recessionary pressures are weighing heavily on crude oil prices at this moment. Nymex crude oil futures have corrected 17% this month and are off 61% from a record of $147 per barrel hit in July 2008. Crude oil is currently suffering from the twin blow of an economic slowdown in developed economies like the US, Eurozone and Japan, and the global credit crisis. But analysts say that prices are yet to bottom out. Pointing out that marginal cost for crude oil is descending at this point in time analysts say the prices are likely to remain subdued. International Energy Agency (IEA) suggests that the global crude oil demand will grow at its slowest pace since 1993. US the worlds largest consumer of crude oil and distillates products is already experiencing decline in demand. Fuel demand from Japan, China and India also is declining. Recently, OPEC announced its plan to stem the price fall by taking off excess supply from the markets. OPEC president Chakib Khelil has said that the cartel will take a decision at the next meeting in Cairo. OPEC members favour crude oil price in the range of $70 and $100 a barrel. But the current economy condition is less accommodative of high oil prices. |
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