Oil Prices Dropped below $60 per barrel

The prices of oil have tripped below $60 a barrel right after the traders observed the economic weakness signs, though it is forecasted by the International Energy Agency that global oil demand would turn into normal stage.

Traders are more concerned and focusing on situation that the rising global recession and the increased unemployment would keep restraining demand, where as stocks in US have been overloaded. “Crude Oil prices have been decreased with sentiment concerning the rapidity of the global economic recovery” Deutsche Bank said in a commodities market report released on Friday. At midday, the oil futures in New York trading were dropped $1.07, to $59.34In the monthly Oil Market report released by the Agency, the agency claimed that global demand would increase in 2010 by 1.7 % a year earlier or by 1.4 million barrels a day to 85.2 million barrels. Where in 2009 the global demand remain constant, rather decreasing 2.5 million barrels a day or 2.5%

The Agency believed that the global demand would run by economic recovery in the developing countries where it is expected to increase by 3.5 percent or 3.9 million barrels a day in 2010, and by a humble increase in demand from O.E.C.D countries for travel or winter fuel consumption.

But the forecast diverts the focus more on the global economic weakness, and has little effect on the market.

A weekly report from the Energy Department illustrates the considerable increase in the gasoline inventories in United States, with total oil inventories reaching its peak level since 1990. The report clearly indicates bearish for oil markets and showed weaker signs of consumption than expected.

“Although the crude oil inventory cover in US remains high above, the declined supply started since May and then got back to normal range in September.” The Deutsche Bank report claimed.

“The market seems to be neglecting the potential for recovery in crude prices as the inventories has tightened up.”

The Agency footed the forecasts for its monthly reports on the International Monetary Fund’s World Economic Outlook report from April that forecasts global economic growth of 1.8 percent in 2010. The monetary fund revised it that number up to 2.5 percent in an update this week.

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