oil

Oil prices dropped today, after forecasters lowered the outlook for global oil demand growth and also due to US crude stocks rising to their highest level in two decades.

Brent crude slipped by 20 cents to $105.59 per barrel, while US crude fell by 25 cents to 94.39 per barrel, reported Reuters.

On Wednesday, the Organization of Petroleum Exporting Countries (OPEC) lowered its forecast for growth in 2013’s oil demand.

The US Energy Information Administration (EIA) projected a similar downward revision earlier this week.

Data also shows that US stocks are now higher than at any point since 1990.

Citing weaker oil use in developed economies, mainly Europe and Japan, as a reason, the OPEC said it expects world oil demand to increase by 800,000 barrels per day (bpd) in 2013, a reduction of 40,000 bpd from the previous estimate.

"The US Energy Information Administration (EIA) projected a similar downward revision earlier this week."

Investors will now keep a close watch on the International Energy Agency (IEA), which is expected to release its data on Thursday.

The latest projections from key forecasters have been highlighted by recent data that showed employers in the US have hired far fewer staff in March.

EIA has released data which showed that US prices were under pressure, after crude inventories increased to the third-highest level on record.

A survey conducted by Reuters analysts suggested the jump of 250,000 barrels in the week to 5 April was less than the 1.4 million barrels anticipated earlier.

However, prices are expected to get some support from the ongoing geopolitical tensions, as North Korea could launch a medium-range missile to show its strength.


Image: New OPEC headquarters in Vienna. Photo courtesy of Priwo.

Energy