Commodity Daily News

Crude Prices Drop on Demand Outlook

The price of spot crude oil continues to fall and is trading at its lowest level since the beginning of March. The most recent decline comes on expectations of reduced demand from Japan following the earthquake and tsunami.

Following the shutdown of Japanese factories and refineries, Japanese demand for crude is expected to drop dramatically and traders have been quick to sell crude oil short.

Also affecting the price of spot crude oil are limited protests in Saudi Arabia. A day of rage was planned but was prevented by Saudi security forces and police. This is in contrast to last week's protest that erupted in gunfire to disperse the banned protests.

Traders should expect further easing in crude oil prices as tensions cool in the Middle East. However, increased fighting in Libya may prompt a rebound in spot crude oil prices.