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Oil Market and Budget Developments
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Oil Market and Budget Developments
Crude prices ease back in September from post-crash highs... Kuwait budget surplus could reach KD 5 bn in FY2009/10…
After recording post-crash highs in August, crude prices slipped back in September. The price of Kuwait Export Crude (KEC) fell to a low of $62.8 per barrel (pb) on 28th September, down nearly $10 from its peak of mid-August. Some analysts interpret the latest decline as a temporary correction within a rising trend – perhaps the result of sudden offloading by floating crude tankers. These tankers had been delaying deliveries to take advantage of high futures prices.
However more fundamental factors may have played a part too. Firstly, concerns had slowly risen that – as the impact of the exceptional policy measures implemented over the past year fades - the global economic recovery (and hence recovery in the demand for oil) may be running out of steam. Secondly, following their mid- September meeting, OPEC members’ comments appeared somewhat less hawkish than of late, a possible signal that the organization is prepared to live with prices trading in a range below their ‘fair’ value of $75 per barrel (pb), at least in the near-term. Finally, still-high stock levels for some crude by-products may also be capping any upward pressure on prices.
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All data at market close |
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