The price of oil appears to be stabilizing.
April 15, 2012-In the past few days, it looks as though oil markets have begun to stabilize. That has been accomplished due to Saudi Arabia increasing output along with other producers of crude. If these trends are to continue, and nothing unpleasant makes a surprise appearance, the pressure on the prices of oil globally could be eased. In turn, that would give a boost to the economy in the U.S. over the coming months.
Last Thursday, an International Energy Agency report said that oil supplies globally over the last couple of weeks have become less constrained. Even though EU and U.S. sanctions against Iran are taking the country’s crude out of the market.
The IEA said, “The cycle of repeated tightening of fundamentals that has been evident for three years has been stopped at for the time being.”
Prices of crude in New York closed at $102.83 a barrel on Friday. It was the fifth weekly decrease since the start of February. A report of slower growth from the world’s second largest oil consumer, China helped oil futures to drop on Friday.
It is too soon to say this trend will last, as a small amount of tension anywhere in the Middle East would spike oil prices once again. Nevertheless, the calmer the oil market is, the better off the U.S. economy is.