High supply and low demand puts downward pressure on oil price

Monthly Brent spot oil price variations - June 2001-June 2012. (Source: EIA, 2012)
Monthly Brent spot oil price variations - June 2001-June 2012. (Source: EIA, 2012)

A combination of a higher supply and lower demand has put downward pressure on the price of oil. By March 2012, a barrel of Brent, the European marker crude, traded at US$125. By the end of June, it was trading at under US$95. Lower oil prices are good news for consumers. For producing countries, however, they mean lower export revenues. How sustainable is the current situation?

OIL reached a record annual average price of US$100 in 2011. In 2012, the global oil market outlook seems to be different. The market is well supplied.

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While for most of 2011, oil demand was well ahead of supply, global production in 2012 has so far exceede...

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