Crude oil for December 2011 delivery fell $2.97 to settle at $90.20 a barrel on the New York Mercantile Exchange after the Energy Department said supplies rose 4.74 million barrels to 337.6 million last week.
Brent oil for December 2011 settlement dropped $2.01, or 1.8 percent, to $108.91 a barrel on the London-based ICE Futures Europe exchange.
Raw materials price extended losses late in the trading day on a report that China may contribute to a planned euro-area investment vehicle and speculation that it would cut other holdings, said Rich Ilczyszyn, a Chicago-based senior market strategist at MF Global Holdings Ltd.
Brent oil for December 2011 settlement dropped $2.01, or 1.8 percent, to $108.91 a barrel on the London-based ICE Futures Europe exchange.
Raw materials price extended losses late in the trading day on a report that China may contribute to a planned euro-area investment vehicle and speculation that it would cut other holdings, said Rich Ilczyszyn, a Chicago-based senior market strategist at MF Global Holdings Ltd.
Brent crude prices has averaged around $111/bbl this year so far even as the US and European economies have decelerated. Liquidity remains strong and plentiful, thus hopes of edging past a recession remain. Brent Crude Oil prices are expected to average $103/bbl over the next 6 months despite the concerns and risks of the European debt crisis. As such, Brent may trade in a range of $90-$115/bbl
The world can afford an average Brent price of $130/bbl in 2012 given that the notional dollar value of the global economy is likely to jump to $73 trillion next year
Even though the global economy is likely to slow down, Brent prices are not expected to fall sharply. Since the world GDP growth has to fall below 2% for a contraction in global oil demand, such a scenario is unlikely
In the short term, if there is an absence of a Central bank easing, the upside potential will remain capped. However, liquidity and inventory levels should temper any spark of a sharp price fall
On the Libyan front, if full production does not hit the market next year, Brent prices could see a brief spike to $175/bbl in 2012. Summing up, Brent crude prices are expected to average $103/bbl while trading in a range of $90-$115/bbl in the next 6 months
The world can afford an average Brent price of $130/bbl in 2012 given that the notional dollar value of the global economy is likely to jump to $73 trillion next year
Even though the global economy is likely to slow down, Brent prices are not expected to fall sharply. Since the world GDP growth has to fall below 2% for a contraction in global oil demand, such a scenario is unlikely
In the short term, if there is an absence of a Central bank easing, the upside potential will remain capped. However, liquidity and inventory levels should temper any spark of a sharp price fall
On the Libyan front, if full production does not hit the market next year, Brent prices could see a brief spike to $175/bbl in 2012. Summing up, Brent crude prices are expected to average $103/bbl while trading in a range of $90-$115/bbl in the next 6 months
