tanker

Oil prices declined today over worries related to the US fiscal crisis and pessimistic Chinese data, which are expected to weaken demand in the world’s top two oil consumers.

Brent crude slipped by 20 cents to $110.20 per barrel, while US crude dropped by 40 cents to $90.28 per barrel, reported Reuters.

Analysts speculate that Brent is likely to drop further between $107.79 and $108.16.

On Friday, automatic spending cuts started in the US, as lawmakers failed to make a decision to avert them, while Chinese data showed that the nation’s manufacturing growth dropped to a four-month low in February.

"Chinese data showed that the nation’s manufacturing growth dropped to a four-month low."

The International Monetary Fund said that the US spending cuts could cost the country about 0.5% of its economic growth, a factor which is anticipated to put pressure on global oil demand.

According to analysts, the effect of the cuts will probably be experienced in the second quarter.

However, Reuters’ analysis showed that crude production from the 12-member Organization of Petroleum Exporting Countries (OPEC) increased to 30.32 million barrels per day in February, from 30.21 million in January, marking the first climb since October.

On Sunday, the UK Brent oil pipeline system was closed, as the operator of the Cormorant Alpha platform in the North Sea found a leak of hydrocarbons in one of the platform’s legs.


Image: According to the International Monetary Fund, the US spending cuts could cost the country about 0.5% of its economic growth. Photo courtesy of freedigitalphotos.net / Suat Eman.

Energy