Oil prices dropped in New York yesterday due to signs that the US Economy is slowing down and the demand of oil is decreasing. WTI crude future for June delivery fell by 0.30 percent to USD $ 112.52 a barrel. Brent crude future for June delivery fell by 0.31 percent to USD $ 124.63 a barrel in London.
The US Commerce Department released data which showed that the US economy grew at an average rate of 1.8 percent per annum from January to March of this year, less than the 2 percent growth rate projected by economists. Consumer spending is expected to have grown by 0.5 percent in March, down from its growth rate of 0.7 percent in February. Furthermore, statistics released by the Labour Department showed that the jobless claims increased by 25,000 to 429,000 in March. All of these factors have contributed to a general feeling of a sluggish recovery of the US economy amongst investors, due to which the expected demand of oil has decreased, leading to the fall in price.
Furthermore, OPEC has announced that it will cut oil exports by 1.2 percent in the weeks leading to the 14th of May, due to a seasonal fall in demand. This also contributed to the fall in oil price.