Crude Oil Futures Decline as Traders remain Uncertain about Future Demand

Crude oil futures remained under pressure on Tuesday and traders were worried that high oil prices could result in decreased demand globally.

Light crude oil futures contract for May delivery declined 3.3 percent or $3.67 to $106.25 per barrel on Globex trading session of New York Mercantile Exchange. Crude oil future contract plunged 2.4 percent on Monday which also happens to be its biggest fall in the month.

According to the latest report of International Energy Agency, worldwide crude oil output is declined by 700,000 barrels per day to 88.3 million barrels per day in the month of March. IEA also indicated more decreased demand for the future.

However, American Petroleum Institute reported the crude oil inventories surged by half a million for the week ended April 8th and reported the decline of 4.6 million barrels in gasoline inventories. API reported that distillates stockpiles reduced by 3.7 million barrels for the same period.

Analysts were hoping for increase in crude oil inventories by 1.6 million barrels and projected the decrease of 1.3 million barrels for gasoline inventories and distillates.

US Commerce Department has also reduced its outlook for future economic indicators while IMF also expects lower gross domestic product growth for Japan and United States. OPEC has also projected the increase of 400,000 barrels per day to 29.9 million barrels in demand for 2011 as compared to last year.

Gasoline futures contract for May delivery declined 1.1 percent of $0.04 to $3.16 per gallon which happens to be its lowest settlement in the current month. Heating oil futures contract also dropped by 2.5 percent or $0.08 to $3.17 per gallon. Natural gas slipped 0.2 percent to $4.10 million British thermal units on Tuesday.

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