Crude oil prices increased last week after a report showed that China's oil demand in June surged to 9.9 million barrels per day, the highest level in four months. China's oil demand is also forecast to grow 5% this year despite modest economic expansion.
Also helping to support prices last week was a larger-than-expected drop in US crude oil inventories, improving US industrial production, housing and labour market data, as well as concerns about supply shortages in light of unrest in Egypt and Libya.
However, selling for technical profit occurred at midweek after oil prices rose to a level showing that speculation was too high. China's weak second-quarter GDP growth also pressured oil prices, while the market debated Fed Chairman Ben Bernanke's comments about possible scaling back of stimulus later this year if the US economy improves. While there is no clear schedule for tapering off QE, the Fed expects to continue its asset purchases until the unemployment rate falls to 6.5% from 7.6% now, and inflation rises to 2%. June inflation was 1.8%.
This article is older than 60 days, which we reserve for our premium members only.You can subscribe to our premium member subscription, here.