Oil barrels

Brent crude fell by eight cents to $111.23 a barrel today, after weak fuel demand dampened optimisim that the world’s biggest economies are on a steady recovery path.

US crude, however, plunged by 26 cents to $92.83 per barrel, as build-up in refined products and a sharp fall in imports were reported in inventory data on Friday, reported Reuters.

The oil demand in 2013 is likely to be influenced by reports on Friday, which showed the expansion of the services sector alongside steady pace of recruitment in the US.

According to analysts, Brent is expected to end the first quarter at $118 per barrel, while US crude will be at $96 per barrel.

It is expected that the global markets will now focus on the US Federal Reserve’s stand on easing financial conditions, as senior Fed officials and some US economists are indicating that the central bank can stop its asset purchases in 2013.

Focus will also be on the European Central Bank, which is expected to take some steps to bring the crisis-ridden region out of recession.

In the final week of 2012, crude stocks plunged to 11.1 million barrels, which is seen as a result of drawdown by refiners for year-end accounting purposes.

Oil prices may also be affected by the tension-filled developments in the Middle East. In Syria, a spurt in civil conflict has impelled the US to deploy troops to protect neighbouring Turkey.

Image: Signs of recovery raised hopes for oil demand in 2013. Photo courtesy of Lars Christopher Nøttaasen.