Investing.com - Financial Markets Worldwide

Brent Lower On Ample Supply And Waning Demand

ByBenzinga
AuthorBenzinga
Published 05/24/2013, 07:45 AM
Updated 05/14/2017, 06:45 AM
DRP
-

Further indications of a slow global economic recovery coupled with ample supply set crude futures up for their largest weekly drop since mid April on Friday. Brent prices slipped toward $102 and traded at $102.45 at 9:17 GMT on Friday morning.

Brent tumbled to a three week low on Thursday following data from China that showed the industrial giant's factory activity contracted for the first time in more than half a year. Chinese Purchasing Managers Index data showed the nation's reading was 49.6, just shy of the 50 point mark with indicates expansion. The report also showed that new orders fell in May, which stoked fears that the nation would fall short of its 7.5 percent growth target this year.

Also weighing on prices is speculation that the US Federal Reserve could ease up on its $85 billion per month stimulus efforts which have flooded markets with billions of dollars over the past few years. Improving jobs data and an increase in new home sales all point to the nation's recovery and could give the Fed cause to pull back on its quantitative easing.

Moving forward, investors will be eyeing the US as the nation's driving season kicks off this weekend. However, many don't expect to see a demand increase as last week's data showed that the nation's gasoline stockpiles were at their highest level since 1999.

According to CNBC, the dismal demand outlook could pull Brent prices even lower over the next few months if economic indicators don't pick up. Some analysts are saying the commodity's price could fall below the $100 mark, as low as $95 per barrel.

BY Laura Brodbeck

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.