oil

Oil prices have dipped again due to apprehensions about a liquidity crunch in the US and China, while the US Federal Reserve’s announcement that it will roll back its stimulus programme has raised worries that demand from the world’s top oil consumers will plummet.

Brent crude fell by 36 cents to $100.80 a barrel, while US oil slipped by 51 cents to $94.67 a barrel, reported Reuters.

On Tuesday, shares in China dropped to their lowest levels since early 2009, mainly due to concerns in the financial sector that an official crackdown on easy credit and tighter funding conditions will continue.

Commodities such as oil and others have come under pressure due a strong dollar, after the US Federal Reserve announced a probable timeline for the central bank to cut back its stimulus programme.

On the other hand, US oil prices received some positivity as a result of record flooding in Canada’s main oil-producing province.

On Monday, a Enbridge spokesman said that major oil pipelines from Canada that deliver nearly one million barrels per day of Alberta oil sands crude, most of it supplied to the US, was shut after a leak was detected on a smaller line during the weekend.

A survey conducted by Reuters showed that US commercial crude oil stocks dropped by two million barrels on average for the week ended 21 June, mainly driven by lower imports and higher refinery activity.

Oil also got some support from the news that Syria’s ongoing civil war is now spreading to the neighbouring countries, as deadly bomb attacks and fighting was reported in Iraq and in Lebanon respectively.


Image: Oil prices came under pressure due to waning demand in the US and China, the world’s two top oil consumers. Photo courtesy of freedigitalphotos.

Energy