Rising reserves along with decrease in GNP worldwide causing pressure. OPEC's reluctance to limit outputs due to economic conditions in Europe fearing a escalating worldwide slowdown. Opening of Gulf of Mexico to oil production and the new fracking techniques in the interior of US causing increased reserves are a concern to OPEC nations. Purposely keeping Oil artificial low will reduce future competition for the OPEC nations. Europe problems have not been resolved. Centralized decision making on stimulus for European banks created small rally which will be short lived because the underlying fiscal policies of multi nations are difficult to change. Euro still in danger.
Crude slumped yesterday amid speculation that China, the world’s biggest energy-consuming country, will raise interest rates to cool economic growth. Prices also dropped on concern Europe’s debt crisis is worsening.