Demand concerns drag crude prices down

Crude oil prices slumped on Tuesday, pressured by the downward revision in the IMF global growth forecast (see macro comment) which fueled concerns over energy demand prospects in the short-term. Benchmark contracts traded once again in a large range, showing that uncertainty over the supply/demand outlook remains high and fuels volatility. Brent 1^st nearby prices traded as low as $106.74/b down from an intraday high at $114.84/b on Monday, while WTI prices dropped as low as $102.10/b intraday.

In the US, API stock figures released yesterday evening showed a 4.5 Mb drawdown in crude inventories compared to a market consensus of a 3 Mb increase, which finally provided some support to crude oil prices this morning on top of reports of worsening production disruptions in Libya due to the lingering political turmoil.