There are two news items worth reviewing that developed over the weekend, and could influence crude oil price, especially WTI price and push it higher today. Let’s check them out:
Crude oil price today – 10 January
The Canadian oil sands fire: the fire caused a shut down in Horizon oil sands which are owned by Canadian Natural resources Ltd. with an estimated output of 110,000 barrel/day of crude oil. As a result the company’s stock fell dramatically.
This fire will cause impediments in the outflow of crude oil from Canada to its biggest importer – the U.S.
Therefore this news will pressure crude oil price, mainly WTI, to rise and perhaps to close the gap it currently has with Brent crude oil price.
The shutdown in the Alaska pipeline: The transatlantic pipeline that carries nearly 15% of U.S. output of crude oil doesn’t work regularly in the past couple of days. This pipeline is owned by, among others, BP. There is still no news as to when the pipeline will go back to its normal production.
These two news items alone could have an adverse effect on the flow of crude oil to the U.S. and will probably push WTI crude oil price higher today.
Nonetheless, there seems to be a split among analysts that Bloomberg asked as 52% of the analysts said crude oil price will rise during the week, while the rest estimated crude oil price will either fall or remain unchanged.
If I would to speculate, I think that as the week will progress, if there won’t be any big developments, and the above news items will be resolved, we should probably see a small downward decline as we will progress to the weekend.
For further reading:
- Crude oil price in 2010 and outlook for 2011 (in this site)
- Natural gas spot price in 2010 and projection to 2011 (in this site)
- Weekly outlook for Crude oil, Natural gas and Gold 10-14 January (in this site)