Crude futures continued their climb through the month of August as North American and European economies reacted to various reports indicating that the worst of the global recession was past. A steady improvement in equity markets triggered a corresponding reduction in the value of the U.S. dollar resulting in further escalation of crude oil prices. News this week that the U.S. Federal Reserve intends to maintain its low interest rate strategy will continue to put a downward pressure on U.S. dollar valuation resulting in corresponding upward pressure on crude future values. On the refined product side, reduced refinery yields in reaction to depressed demand coupled with a reduction in imports have caused a tightness in supply situation in the New York Harbour market resulting in increased spot market pricing for refined products.

An OPEC report released this week now predicts that global demand for OPEC crude will be substantially reduced in 2010. OPEC now expects demand for crude to average 27.9 million barrels a day in 2010 down 480,000 barrels from its 2009 estimate. The drop is attributed to weakened global economic conditions.

• The U.S. Labor Department indicated last week that initial unemployment claims fell more than expected to 550,000 for the week ending Aug 1. While the total number of people seeking jobless benefits increased, Department analysts saw the report as fresh evidence that the economy is improving providing support for higher energy prices.

• The U.S. Federal Reserve indicated on Wednesday that it will be maintaining its policy of low interest rates.

• U.S. trade deficit was reported on Wednesday to be lower than originally anticipated causing optimism about the economy in general.

• The National Association of Realtors released data this week indicating that existing home sales are rising all across the U.S.