WTI crude oil to remain weak

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Mumbai, Jul 23: West Texas Intermediate (WTI) crude oil prices in the world market may continue to remain weak this week on weakening US demand, returning of supply from Brazil and Nigeria and easing tensions over Iran’s nuclear programme.

WTI prices fell more than $21 a barrel or 14% after hitting an intraday high of $147.27 a barrel on July 11, touching at $126.37 on Wednesday on forecasts that Dolly, a hurricane in the Gulf of Mexico, will miss rigs in the region, which accounts for 25% of US crude production.

“The near-term outlook for diesel and gasoline demand remains weak. Rising concerns over weakening US demand due to high oil prices and the poor economy may weigh on crude prices in the short term,” an analyst with leading oil marketing company said.

The dollar is anticipated to strengthen on expectations of interest rate increases to curb inflation. These factors will encourage investors to sell commodities and move funds to other markets, he said.