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OPEC price driven down by weak demand, strong U.S. dollar

12-20-2011 10:09 BJT

VIENNA, Dec. 19 (Xinhua) -- The weekly average price of the Organization of Petroleum Exporting Countries (OPEC) dropped by 3.24 U.S. dollars last week, falling to 106.01 dollars per barrel, due to slowdown in demand growth and strong U.S. dollar, the Vienna-based cartel said Monday.

The latest report released by the U.S. Department of Energy (DOE) last Wednesday showed the U.S. gasoline inventories increased substantially over the previous week, which means the U.S. gasoline demand was weak.

The DOE confirmed that its average daily crude oil demand fell by 1.8 million barrels and its crude oil imports decreased by 1.1 million barrels per day.

Weak demand in the United States, the world's largest oil consumer, has also led to a lot of selling on the market from Wednesday to Friday.

According to analysts, the U.S. oil demand would maintain the current level for some time in the future.

At the same time, investors were also disappointed about the results of last week's EU summit. There is still no confidence in a successful settlement for the European debt crisis.

The European oil demand would drop for the next period of time, said OPEC.

In addition, the decline in the euro exchange rate increased the concerns about an overall economic recession in Europe caused by the debt crisis, which would definitely lead to a reduction in global crude oil demand.

The OPEC ministerial meeting last Wednesday decided to maintain the current daily output of 30 million barrels per day unchanged. The cartel said the total world crude oil demand would increase slightly next year , which, however, would come from the non-OPEC producers.

As the world's largest oil producer offering one-third of total global crude oil, OPEC took a cautious attitude to the growth prospects of global oil markets, thus increasing concerns about a weak global economy.

In addition, the U.S. dollar last week showed a strong upward trend. The dollar index has reached its highest level since January this year.

Furthermore, some analysts believe at least in the next period of time, the sustaining concerns about the eurozone would continue to support a strong dollar, which will undoubtedly put pressure on the international oil price.

 

Editor:Zhang Pengfei |Source: Xinhua

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