OPEC oil price rebounds

01:14, 10 July 2012

VIENNA. July 10. KAZINFORM After a sustaining decline for nine consecutive weeks, the weekly average price of the Organization of Petroleum Exporting Countries (OPEC) rebounded back to 96.69 U.S. dollars per barrel last week, increasing by 6.5 percent compared to the previous week, the Vienna-based cartel said Monday.

Some analysts believe, however, the rebound in crude oil price was due to some kind of technical operational factors, such as the increasing confidence on the international oil market because of the posistive result at the EU summit at the end of June, Xinhua reports.

Besides, the monetary easing measures launched in succession by the European Central Bank and the Bank of England, as well as the no breakthrough of negotiations between the six-party and Iran, and the Western embargo on Iran's crude oil with effect from 1st July were also considered factors supporting the crude oil price.

However, no obvious changes have been made in economic factors that affect oil price in real sense: The perspectives for the European debt crisis remain uncertain; the U.S. economic recovery remains slow; and it still lacks of strong drive force supporting oil price.

At the same time, the strong U.S. dollar also imposes pressure on the international oil price.

The latest figures showed that the manufacturing industry of the most important five EU member states declined in June.

As the euro zone's largest economy, the Germany purchasing managers index (PMI) kept falling for four consecutive months, reaching the lowest level over the passing three years.

In addition, the manufacturing sector in France, Italy, Spain and the Netherlands also contracted in varying degrees.

Moreover, the Greek PMI dropped back to the bottom among euro-zone countries. Portugal also said that it cannot achieve the target on reduction in budget deficit, unless its indirect tax revenues could improve.

During this period, there was no good news from the U.S. Besides, the emerging economies including China have different levels of economic deceleration.

Although the European Central Bank, Britain and China have adopted a new round of monetary easing measures, some economic analysts still believed that if the global economic outlook further deteriorated, the international demand for commodities, including crude oil may drop.

However, some other analysts expected the monetary easing measures of the EU and some other countries would to a certain extent ease the concerns on economic decline, and the intensification of the Western embargo on Iran's oil would support oil price to some extent.