Even though the International Energy Agency made an historic effort to reduce the high price of oil, it remains over $100 (USD) per barrel which is quite worrisome to economic forecasters. Added to the fact that 60 million barrels were released from reserves and that Libya has made a return to the market, the price of oil remains historically high.
As the world’s energy watchdog, the IEA warned that the price of oil was unsustainable and at this rate it is damaging the global economy. Within the past four months the global economic outlook has dampened even further which is why there is such great concern.
In the meantime, Libya also returned approximately 430,000 barrels of oil yet the price remains higher than $100. As well, Brent crude rose again to $113 per barrel and this was the price prior to Libyan oil and reserves being released to the market.
Traders are speculating that the price of oil will rise even further and new data provided by the US Commodities and Futures Trading Commission indicate that there is a definite rise in long positions in trading oil futures.
The demand for oil in China is at the lowest point of the year and both the United States and Europe are struggling with a debt crisis. OPEC, the IEA as well as a substantial amount of energy producers blame the lack of demand on struggling economies.
It appears as if the major reason for a decline in supply is lower output is Libya as well maintenance on the North Sea. Bank of America also believes that attacks on Nigerian pipelines may also play a role in the shortage of crude. Even releasing reserves hasn’t brought prices down because it is still known that supply is problematic.
