Oil prices dropped today because of apprehensions over a sluggish economic recovery in the US, the world’s top consumer, while prices received some support from a strong demand outlook in Asia.
Investors expected more downside pressure on oil markets after the US released discouraging factory data, which indicted at a deteriorating economic pace.
A survey by Reuters showed that US commercial crude inventories were predicted to have increased by 2.3 million barrels, while refinery demand was speculated to have increased by 0.5% points from the previous week’s level of 85.7% capacity.
The world’s second-largest oil consumer, China, imported 1.08 million barrels a day of crude from Saudi Arabia in 2012, a jump of more than seven percent from 2011.
On Monday, Saudi Arabia Oil Minister, Ali Al-Naimi, said he anticipated a rise in demand for the Kingdom’s crude in Asia.
Meanwhile, ExxonMobil is still cleaning up an oil spill in its Pegasus pipeline in Arkansas. The pipeline, which is used to supply US Gulf Coast refineries, has the capacity to carry more than 90,000 barrels per day (bpd) of crude to Texas from Illinois.
Investors have predicted pressure on the US crude benchmark as a result of an inventory build up in the US Midwest.
Image: China imported 1.08 million barrels a day of crude from Saudi Arabia in 2012. Photo courtesy of freedigitalphotos / domdeen.