The European zone problem is here to stay and it may be heading to become worse in the coming days and weeks, before recovering. Safely, we can assume the European zone to remain economically weak for the next few quarters.
The US is most likely to see a drop in crude oil demand in the coming months, thanks to high unemployment levels, and the expected cuts in government spending due to high budget deficits.
The Chinese demand is also not set to see a sharp rise in the coming months, as the government there is taking steps to cut down the run away spurt in inflation. That means lower demand for crude oil from the second largest consuming nation.
The demand from the rest of the world, at best could remain steady or may show a very marginal rise, which may not alter the overall global demand. And there are also new oil and gas finds in countries like India and China, which are reducing their import needs.
And the Gulf countries are already reeling under massive economic problems for which they need to increase their revenue. And the only way these poor countries can augment their resources, is to pump and sell more oil than what they commit at OPEC summits.
So expect more supplies and low demand for crude in the coming months, due to which the crude oil prices would remain subdued, with downward bias. The realistic estimates would be a 50 dollars to a 70 dollars band for crude oil for June 2010 to October 2010 period.
We can take a review of the crude oil price projections , after reading all the latest trends by the end of September 2010.