Light-sweet crude oil for September delivery fell to a low of $77.68 per barrel earlier this week, while Brent-crude oil saw a low of $102.72 per barrel as the deteriorating European sovereign debt crisis, coupled with concerns over the US credit rating downgrade, fuelled a bout of panic selling.
 
However, light-sweet crude rallied 9.8% to $83.14 on Wednesday after the Department of Energy showed an unexpected decline in stockpiles. The report showed that US crude oil inventories decreased 5.23 million barrels to 349.8 million barrels last week, however concerns over the escalating European debt crisis soon took over and pushed light-sweet crude down to $79.53 a barrel.
 
Also weighing on crude oil prices this week was a monthly oil market report release by the International Energy Agency on Wednesday. The report disclosed that there was a decline in demand and an increase in supply of crude oil. Following Saudi Arabia raising their output by 100,000 barrels per day in July, the kingdom had fully compensated for the loss of Libyan output. Concerns over debt levels in Europe and the US, and signs of slowing economic growth in China and India, are beginning to haunt the market and raised fears of another recession, which suggests that demand for oil may soften.