As a consequence of the concerns that the growth of United States economy and the demand for crude will weaken this year, the oil prices have gone down to below 93 dollars per barrel. In Europe, during the early afternoon, oil benchmark for the month of August was 92.91 dollars, down by 2 dollars and 50 cents per barrel as is seen in the New York Mercantile Exchange electronic trading. By Wednesday, it gained one dollar and twenty four cents to settle at a price of 95.41 dollars.
Brent crude in London for the month of August had oil delivery which went down by 3.34 dollars to a new price of 110.87 dollars per barrel as seen on the ICE Futures exchange. According to the chairman of the Federal Reserve, Ben Bernanke, the United States economy is weaker than its previous forecast. The Federal Reserve Bank also adjusted the country’s GDP growth estimate from a previous 3.3 percent to the current 2.9 percent.
Furthermore, Bernanke stated that the Fed has no plans of extending quantitative easing or Treasury purchases. This policy has been very good for pushing the prices of crude higher and increasing monetary liquidity. According to Cameron Hanover, an energy consultant, with the Fed not extending asset purchases, it is expected the stalling out of the engine of inflation, which should affect the prices of oil for a longer term basis.
Last month, the demand for oil was so strong that it helped increase crude price to about 115 dollars last month.
