A brief overview of oil price developments, supply and demand and significant market movers.
Global stock and oil markets may be moving their separate ways after a one-month period of moving in unison, according to a report by The Wall Street Journal.
Oil-market enthusiasm could soon fade on the back of a negative outlook on global demand and increasingly high crude inventory levels.
Crude for October delivery was recorded at $96.15 in electronic trading on the New York Mercantile Exchange on Tuesday. Brent oil for October fell 17 cents to $113.62 a barrel on the London-based ICE Futures Europe exchange, according to Bloomberg data.
Bloomberg also reported that oil declined as US equities fell on concerns that European leaders might struggle to resolve the ongoing debt crisis.
“We are having a little follow-through after yesterday’s big drop,” said Phil Flynn, senior market analyst at the Price Futures Group. “There are some potential bearish developments out there. Concern about Spain asking for a bailout is making the market nervous.”
Anthony Beryl, president of Beryl Investment Group, told The Wall Street Journal that in order for oil prices to keep up with the momentum currently being experienced in equities, economic indicators are going to have to signal an improved demand structure moving forward.
“Words are great, stimulus is great, but traders want to see the results,” said Beryl. “If you start to get industrial production moving up, then the underlying demand for crude will go up along with that. If you don’t get that increase of growth from the Western countries, you’re going to see crude go sideways or down.”
Meanwhile, Iranian Oil Minister Rostam Qasemi has announced that the West cannot keep Iran out of the global crude oil markets.
In a public statement, Qasemi claimed that Iran’s oil industry is its main force against foreign sanctions and has “defeated the enemies’ efforts to isolate Iran in the world.”
“The West is trying to disrupt Iran’s oil sales and exports by exerting different pressures (on the country) and keeping Iran away from global markets. But Iran’s oil staff have thwarted these attempts,” Qasemi was quoted as saying