Despite revision in global economic growth forecast for two times since April, 2012 by International Monetary Fund, lowering growth rates, the prices of Crude Oil at international market have been gaining, though slightly, amidst anticipated easing measures from the largest consumer of Crude Oil, China. In addition, investors and analysts are desperately waiting for latest economic data from China to spot the further price magnitude of the energy, i.e., Crude Oil.

Supported by expected stimulus measures from core global economies, geopolitical tensions in the Middle-East are also providing momentum to the prices of Crude Oil. In line with rising political tensions between Turkey and Syria involving civilians and military, the oil production in the north of Iraq and transportation of energy is anticipated to be threatened. Sanctions on Iranian oil shipments concerning nuclear program is ultimately affecting the global oil supply and consequently prices. Despite Iran’s export cut at international market, increase in production from OPEC’s largest oil producer, Saudi Arabia, to a 30-year high level, 10 million barrels a day has given some relief to the major energy consumers globally.

With stimulus packages in pipeline in major economies like Euro-zone, China, U.S (buy back of Mortgage Backed Securities), the prices of Crude oil is expected to rise amid increase in aggregate consumption globally. At present, on the other side, considering the unclear future of Euro-zone, despite bail-outs and easing, and shift from Crude oil usage to gas in U.S, it seems difficult to predict on the prices of Crude oil for the days ahead. As per analysts, at least traders can be assured of increase in Crude oil consumption in China amidst additional monetary stimulus supporting industrialization and consequently overall economic activities.  

Note: The blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.