What's Moving the Oil Markets?

•Crude futures firmed during European morning trading on Tuesday, stabilizing after Monday's late selloff which was triggered by gains in the US dollar following the US Federal Reserve chairman's speech warning of the increasing risk of inflation.

•Although petroleum futures markets remain very sensitive to the financial markets there was some oil-specific news, with the International Energy Agency revising downward its estimate for oil demand growth this year by 230,000 b/d to 800,000 b/d, which would be the smallest rise in consumption in years.

•The IEA report, while cutting overall oil demand for this year in both OECD as well as Asian countries, also said that strong economic growth in parts of Asia was still driving oil demand. At the same time, the IEA cut non-OPEC supply in 2008 to 50 million b/d, 300,000 b/d less than previously forecast, increasing the "call" on OPEC oil by IEA by 300,000 b/d to an average of 31.6 million b/d.

Updated: June 10, 2008