The crude oil prices have gone down steeply from over 83 dollars two months back to less than 72 dollars this week. The sharp drop in the crude oil prices is due to increasing fears of a double dip recession in the US, Japan and Europe.
But we need to see whether there is a real danger of a double dip recession in Europe. Germany , France and UK are doing relatively better and their local economies are also showing signs of reviving up. Also the US economy is not drowning as feared, and it is also likely to show positive growth, albeit at very low levels, in the coming quarters.
Coupled with this is the sure shot signs of healthy growth in China, South Korea, India and Australia.
These four economies together can pull up the global growth significantly and can hence help to make up for the loss of growth in Japan and some parts of Europe.
So expect crude oil demand to remain decent in the coming months, and the prices can be expected to remain in the 70-85 dollars band. And based on hedge fund investment pattern the prices would move in either direction.
Nothing is there to suggest today, that the crude oil prices can go down below the 65 dollars mark.
Why crude oil prices are sliding further ?
August - 31 - 2010 - Tuesday
