During the first week of May, oil prices decreased in spite of the increasingly difficult situation in Eastern Europe.
Ukraine is crucially important as a place through which Russian natural gas passes on its way to supply customers in Western Europe. For this reason, any changes on the ground are always closely followed by investors, who are conscious that should the situation escalate supplies may be cut off, which would cause energy prices to rocket.
Even in the face of the unrest in Ukraine, oil prices were kept down by official reports showing that stocks of US crude oil had risen greatly in the previous week. In fact, the increase of 1.7 million barrels caused supplies to reach a weekly level that had not been seen since 1982, of 339.4 million units.
These results indicate that the US demand for energy is still relatively weak and, in fact, the US economy is reported as having grown by just 0.1% during the first quarter of 2014. This is a substantial decrease on the previous quarter’s figure of 2.6% and one that is at odds with the forecasts.
A slow economy requires less energy for manufacturing, as well as a reduced need for oils such as Mobil Delvac Super 1400 15W/40, which are used in the trucking industry.
A second factor that has prevented oil prices from rising is the fact that Libyan oil exports recently resumed from the port of Zueitina, after protests had closed down this important hub for several months.