As a new week starts the question is whether the price of oil will continue to fall. Last Friday the new signs of economic sluggishness around the world sent commodities prices lower. Crude oil dropped $2.34, or 3 percent, to $84.89 a barrel on the New York Mercantile Exchange. Demand for oil is expected to be weaker in the second half of the year. The U.S. is the world's biggest oil consumer, and the prospect of less demand tends to push down prices.
Oil traders read more troubling economic headlines on Friday. Borrowing rates for Spain and Italy rose to distressing levels because investors think more needs to be done to resolve Europe’s debt crisis.
Brent crude, which helps set the price of imported crude used to make gasoline, fell by $2.51, or 2.5 percent, to end the day at $98.19 per barrel in London.
Bloomberg reported that Crude for August delivery fell 44 cents, or 0.5 percent, to settle at $87.22 a barrel on Friday on the New York Mercantile Exchange. Prices slumped 18 percent last quarter, the biggest decline since the final three months of 2008. Futures have averaged $97.87 so far this year.
Brent oil for August settlement advanced 93 cents, or 0.9 percent, to $100.70 a barrel on the London-based ICE Futures Europe exchange. Brent fell 20 percent in the second quarter. It has averaged $113.18 in 2012.
New York futures averaged $93.35 a barrel in the second quarter, below Barclays’ previous forecast of $104. Brent averaged $108.76, less than the bank’s estimate of $120.
WTI will average $115 in 2013 and Brent will be $125, unchanged from their earlier forecasts, the analysts said.
Sources: Reuters, Bloomberg.