Crude oil prices fell week-on-week during the seven days to 26 August, although they had recovered from two-month lows seen earlier in the week, when US crude traded under $72 a barrel.
The US’ benchmark October West Texas Intermediate (WTI) contract was trading at $73.42 a barrel on 26 August, down more than $2 from the $75.86 a barrel it had been valued at a week earlier. On 23 August, the contract traded below $72 a barrel for the first time since June.
In Europe, the October Brent contract was trading at $74.56 a barrel, down almost $2.50 from $76.97 seven days earlier.
Meanwhile, the average price of the oil exported by the international oil cartel Opec’s 12 member states was $69.69 a barrel, down more than $3 a barrel from the $73.05 it had traded at a week before.
The lower prices seen earlier in the week were attributed by analysts to ongoing fears over the recovery of the global economy, particularly in Western Europe and the US, and the impact this might have on demand for crude oil and gasoline.
These fears were played out in the US on 25 August, when a weekly Energy information Administration report showed that stocks of crude oil grew by 4.1 million barrels to 358.3 million barrels, while gasoline inventories also increased, by 2.3 million barrels to 225.6 million barrels.
Stocks of crude oil are up 14.5 million barrels from the same period in 2009, while gasoline inventories have increased 17.6 million barrels year-on-year.
Analysts continue to contend that lower than expected production capacity expansions during 2010 and 2011, in part as a result of the BP’s Macondo oil spill disaster in the US’ Gulf of Mexico, and robust growth, should support prices in a $70-80 a barrel range for the foreseeable future.