OPEC oil price keeps rising slightly

July 16, 2012 9:59 pm 

VIENNA, July 16 — The weekly average price of the Organization of Petroleum Exporting Countries (OPEC) continued to increase slightly last week, reaching 97.26 U.S. dollars per barrel, the Vienna-based cartel said Monday.

The U.S. intensification of embargo on Iranian crude oil was considered as a major reason for the price rise.

The U.S. Department of Treasury announced last Thursday that dozens of Iranian companies and banks that helped Iranian government against the Western sanctions had been exposed and put on the sanctions blacklist.

In fact, before the official announcement, relevant speculation had already exerted pressure on the international crude oil price.

Analysts of the Eurasia Group expected, due to sanctions, the Iranian crude oil entering the international crude oil market is reduced by 1-1.5 million barrels a day.

According to OPEC's latest monthly oil report, the average daily output in Iran fell to 2.96 million barrels in June, representing a daily reduction of 188,000 barrels compared to May and 740,000 barrels compared to the level of 2010.

Analysts believed the international crude oil market still lacks strong impetus, with global economic outlook remaining weak.

The Asian Development Bank has lowered its forecast for the growth of the United States, the euro area and Asia's developing economies.

Growth of China's gross domestic product (GDP) dropped to 7.6 percent in the second quarter, the lowest level since the first quarter of 2009 and down from 8.1 percent in the first quarter of 2012.

A slowdown in one of the world's fastest growing economies would definitely affect the forecast of world crude oil consumption growth.

The relatively strong dollar also continued to put pressure on oil price, because a strong dollar means higher oil prices for the non-dollar buyers.

In addition, the crude oil investors are waiting for the U.S. economic figures. It is expected that even if the figures would be unfavored, the international oil price would still be supported if the Federal Reserve launches a new round of quantitative easing policy. (PNA/Xinhua)

CTB/mmg

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