13 May 2011 | Lindsay
The average price of oil was up $8.25 (£5.06) in April compared with
March, reaching $118 (£72.42) a barrel.
The Monthly Oil Market Report
from the Organization of the Petroleum Exporting Countries (OPEC) also reported the
average monthly basket price had gained $35.76 (£21.95) compared with a year
ago. April was
the ninth consecutive month in which the basket price had increased.
Escalating oil prices have caused the cost of a whole range of goods bought
by businesses to increase. However, the report found it was difficult to tell
if more recent falls in the oil price were indicative of future reductions.
“On 5 May, crude oil prices plunged, with Brent futures shedding more
than $10 (£6.14) per barrel, and on the following day, prices fell even
further. This sharp correction was the result of a huge sell-off in commodity
markets including oil, which triggered profit-taking as losses gained
momentum,” the report added.
In predicting future demand, more fragile recoveries in the US and Japan
were offset by growth in developing economies, particularly India and China.
“These economic uncertainties are clouding market needs for the remainder
of the year,” the report said. “If the slowdown in the US economy were to
persist, this would likely affect demand growth. In Japan, the recent
catastrophes have already dramatically reduced oil consumption… in contrast,
Chinese economic growth continues to be stronger than expected.”
OPEC’s spare capacity, adequate stock levels
and lower demand for its crude oil during the first half of the year should
help market stability, it said.
the International Energy Agency found in its monthly Oil Market Report that oil prices are set to remain high despite