Brent crude dropped 50 cents to sink to $108.90 a barrel today because of renewed fears of a further decline in oil demand due the looming fiscal cliff in the US.
The fiscal cliff increased concerns among investors that the uncertainty would push the world’s top oil consumer into deep recession.
US crude, however, gained six cents to $86.13 a barrel, reported Reuters.
The prices have also been influenced by new data from Japan, which had shown that it’s economy shrank 0.9% in July-September from the previous quarter, indicating a faltering global demand and weak consumer spending that could lead to a mild economic recession.
On the contrary, the oil demand in China, the world’s second-largest fuel user, grew by 6.5% in October from the year before.
The latest data from China indicated that the economy had shown recovery from its slowest growth in three years as infrastructure investment accelerated and output from factories has been greater in the recent past.
Meanwhile, Saudi Arabia Oil Minister, Ali al-Naimi, commented that the global oil market and the current oil price are in good form, which indicated that there will be continuity in oil supply between the country and its allies, thereby keeping prices around the current levels.
Image: US crude gained six cents to $86.13 a barrel. Photo courtesy of Lars Christopher Nøttaasen.