Arab Light is what counts, mate!

Short sellers in the oil trading market must be boasting a broad smile on their faces as the black gold dipped to its seven-month low within no time. The price of WTI crude oil touched $68/bbl on Wednesday, from $85/bbl at the start of the month.
But for investors there are more reasons for creases on their foreheads, as broad consensus among oil experts suggests that oil has not bottomed out yet. "Its premature to say weve placed the lows," said Jim Ritterbusch, a leading energy expert.
Jim expects oil price to bottom around $55/bbl, whereas other experts predict lows of $50/bbl in a few days time. Even the most optimistic seers do not expect any rebound in the immediate future.
There are enough reasons to believe that oil price will remain under immense pressure as concerns over European debt crisis are far from over.
Fresh fuel has been added by Germanys move -- banning speculative sales till March 2011. The move sent panic vibes all across Europe sending Euro down to its four-year low.
"If you don feel like you can sell bonds and equities in Europe, you
e left with selling the euro to express a negative view," said Greg Gibbs, a foreign-exchange strategist at Royal Bank of Scotland Group.
Since oil is traded in terms of the greenback, euros fall against dollar has made oil a less attractive investment. Oil becomes more expensive for holders of other currencies whenever the dollar shoots higher.
Serious concerns loom over the future of oil demand as debt crisis could slow down European economies and keep a check on oil prices. Moreover, Germanys ban creates a view that the authorities foresee worse times ahead than what may appear on the surface, which should keep prices under pressure.
Thankfully, there may be some good news for Pakistani consumers, if oil finds a temporary base under $70/bbl. Not only will it bring respite in the price of petroleum products and result in lower electricity tariffs in June, but it will also help reduce the import bill.
Interestingly, however, the positive impact of falling crude on Pakistan need not be overplayed.
The price of Arab Light, which happens to be the relevant oil price for Pakistan, has dropped at a much lesser pace. Unlike the 20 percent month-to-date decline in WTI crude oil price, Arab Light eased by just 12 percent. Hope, dear motorists, is a dangerous thing.