Yesterday there was no trade in the U.S. due to Martin Luther King Day; however, Brent oil was traded in Europe and it moderately declined: on 17/1/2011 it settled at 97.3 $/b a 0.83% fall.
Crude oil price (Dated Brent spot) is at 97.46 USD/barrel a 0.16 USD/ barrel increase or 0.17% as of 7.23 AM.
Nymex crude oil price (WTI) is currently trading as of 7.12 AM GMT at 91.29 USD per barrel, a decrease of -0.27% or -0.25$/b.
Here are three news items that will probably tilt crude oil price to incline:
The trans Alaska pipeline: after the pipeline, which carries nearly 11% of the U.S. crude oil production, shutdown last week, yesterday restored its flow to the U.S as reported by Bloomberg.
OPEC Quota: according to Bloomberg, the total quota of OPEC members has risen during December to 26.776 mil b / day an increase of 129,000 barrels – this is a rise above the agreed upon quota OPEC agreed to maintain back in 2008. Despite this news, the WTI spot price rose during December 2010 by 5.3%. This news could suggest there was a rise in demand for oil worldwide during December (probably related to the cold weather) and OPEC tried to meet this rise in demand by increasing its quota output. If OPEC will continue
The weather: The recent snow in the Northeast of the U.S. from last week has subsided, however it’s still cold, e.g. in New York temperatures predicted to reach as low as 16 f (-9 c) on Friday with a chance for snow fall. As the temperatures will continue to decrease, the demand for heating will increase, in the U.S. this include, among other, an ongoing rise in demand for propane.
Since the first two news items pressure crude oil price to decline, while the latter item, regarding the weather, pressures oil price to rise, if I would to speculate, we could probably see moderate rises and falls as the week will progress with no clear trend in crude oil prices.
For further reading (in this site, unless stated otherwise):
- Oil: The Other Gold (in Forbes)
- Oil prices rising too high, too fast (in Reuters)
- Weekly outlook for Crude oil, Natural gas and Gold 17-21 January
- Crude oil price & natural gas price – Weekly recap January 10-14