The price of crude oil continues to fall for the third day, due to the indication that the global demand for petrol is sluggish and stockpiles are growing. Last week, the diesel and gasoline inventories in U.S. reaped more than usual. The Energy Department has put up the fact in its report. Countries like Malaysia and India have raised fuel prices, joining countries like Taiwan and Indonesia in efforts that can reduce Asian demand for oil and slow down the global oil-consumption rate considerably.
The Energy Department’s report confirmed that there are weaker settings in U.S. People are making changes to their pattern of fuel management. Knowing that most of the growth that was predicted lies in the regions that sponsors fuel use, the influence of higher prices has started to limit consumer demand.
The price of crude oil for the month of July fell by 0.6 percent to 121.61 dollars a barrel at the New York Mercantile Exchange. The price of oil on the other hand fell 1.6 percent to end at 122.30 dollars. The futures market is also up by 86 percent from what it had a year ago.
In the four weeks till May 30 the rate of fuel consumption has averaged around 20.4 million barrels per day, which is actually 1.1 percent lower than what it was a year before.
The demand for Gasoline, in terms of the quantity provided by the refiners has also dropped to 9.1 million barrels per day. The demand for fuel has actually fallen lower than the five year average.
At London's ICE Futures Europe exchange the rates for July settlement of Brent crude oil dropped by 0.6 percent to 121.32 dollars per barrel.
The problem of inflation has been an important issue with rumours of increase in interest rates. Investors acquired commodities and oil as an inflation hedge against the falling dollar that fell to a record low. The rate of Gasoline for delivery in July also fell down 0.43 cent. New York there was a drop of 4.7 percent in the contract to settle at 3.1951 dollars for a gallon.
According to the Bloomberg News survey, the gasoline inventory gained 1.4 percent last week, bringing the 209.1 million barrels to a 3.8 percent increase over the previous week. Stockpiles are also expected to increase to 825,000 barrels. The higher than normal rise in inventories is an indication of weakening gasoline demands.
Last week, oil refineries functioned at 89.7 percent of their capacity which is up 1.8 percent from the previous week. The profit margin, for making three barrels of crude oil into two of petrol and one of heating oil increased by 46 percent in the month of May.