Crude oil and natural gas prices update for 8th of November

Oil and Gas Prices

Crude oil price (December 2010 futures), as of 19.45PM GMT, on the New York Mercantile Exchange (Nymex), is at 86.96 USD per barrel, which represents a 0.11 dollar increase or a 0.13% incline.

The WTI spot crude oil price settled yesterday at the closing of the trade at 86.72 USD per barrel, a decrease of 0.15% compare to the previous day’s rate as of 19.04PM GMT.

The ICE Brent crude oil price (futures for December 2010) reached 88.5 USD per barrel – a 0.44 percent increase as of 18.00PM GMT.

The natural gas prices also rallied a bit after it dropped yesterday and is now being traded, as of 19.44PM GMT, the Nymex Henry Hub Future price for December 2010 is at 4.09$ MMBTU(one million BTU) which is a 3.76% increase or 0.15$.

Main News

After the very sturdy time we had last week with the news about the quantitative easing which I have already elaborated lengthy last week, this week with moderate fluctuations with the crude oil prices along with the rest of the main energy commodities. For this week, besides following on how the QE2 will affect the US dollar and, consequently, the main commodities including crude oil, let’s quickly review some other news that could have some effects on the crude oil price, especially the news about crude oil demand estimates for 2011:

There is a continues bet on crude oil, made by hedge funds as their analysts suspect, according to Bloomberg, that the bullish onslaught will continue this week and could be a long term event. One of the reasons for making this prediction is based on the updated estimates of crude oil demand for 2011, which were revised from an average of 86.9 mb/day to an average of 88.2 mb/ day which is an increase of 0.3 mb/ day.

As I recall these estimates are being updates nearly on a monthly basis, so it’s hard to see how, if any, they could have an affect on investors’ perspectives about petroleum. I’m very doubtful about this report having any real effect on demand for oil. Therefore, if this updated estimate will have any effect on crude oil price, I think it will be very moderate. It is far more likely that the QE2 will have a much more positive effect on crude oil price in the short run.