Oil Prices Caught Between Two Trends in Economy

Business Week reported that oil prices are getting affected by two competing trends in the global economy: Europe’s debt problems slowing its economy while developing nations boosting oil demand to a record in 2011.

The market news is quoted as saying:

The growing energy needs of China, India and other developing nations will continue to prop up oil prices despite sluggish economic growth in Europe and the U.S., said Andrew Lebow, a senior vice president and oil broker at MF Global.

Meanwhile, the European Commission said that Greece’s budget shortfall will be more than expected, increasing fears that a default there could spark a slowdown in Europe. Greece’s deficit as a percentage of national income is now expected to hit 9.5 percent, up from an earlier estimate of 7.6 percent.

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