There has been a reversal trend of the crude oil prices when it started to show a downward trend in the month of July. Crude oil fell to the lowest in 12 weeks as the U.S. dollar strengthened to a one-month high against the euro and on signs gasoline demand may extend declines. As predicted, the demand for gasoline has decline as a result of cost cutting measures as more people are consuming less gasoline and diesel and are adopting an oil saving policy in their everday life. if the trend continues, there is no reason why crude oil prices cannot drop further to a more fundamentals level maybe at around USD80 per barrel.
According to bloomberg.com, crude oil for September delivery fell $2.54, or 2 percent, to $122.19 a barrel at 2:45 p.m. on the New York Mercantile Exchange, the lowest close since May 6. Oil, which surged to a record $147.27 a barrel on July 11, fell as low as $120.42 today.
Hopefully this can be a better sign for the economy. Maybe our Malaysia government can also have some toughts on the current oil prices situation as the oil price drop has been around 10% - 17% and maybe can have some mechanisme in adjusting the petrol and diesel prices.