Here’s the main news items relates to the crude oil market for March 29th:
Middle East and North Africa – update
Libyan war- update
The rebels were met with resistance from Qaddafi’s armed forces as the rebels have advanced westward towards Sirte – Qaddafi’s hometown and were halted about 50 km from the city fringe.
US will send an envoy to meet with the rebels in Benghazi in the east, for an unofficial meeting.
Tomorrow, the US is expected to relinquish the lead on this operation in Libya to NATO.
Due to the aid of the allied forces’ attack on Qaddafi’s army, the rebels have managed to recapture during the weekend the cities along Libya’s coast line, including the oil ports Brega and Ras Lanuf.
The oil production in Libya is still low as it dropped from nearly 1.65 million barrels per day to an estimated of 400,000 bbl/d.
There are still riots and unrest in other countries in the Middle East including Syria, Yemen and Bahrain (see here for more news updates on these countries).
Japan’s nuclear disaster– update
There are still concerns of radiation contamination in Japan’s food supply because of the meltdown in the nuclear reactor in Fukushima.
Nigeria is aiming to finish refineries upgrades by 2012
According to Reuters, Nigeria is aiming to finish the refineries upgrades by 2012; its four refineries are working only at 30% capacity because of low performance and maintenance. Nigeria is expecting to raise its refineries output to reach 60% capacity by the end of next year.
Nigeria is an OPEC member since 1971, has the second largest oil reserves in Africa and is the continent’s primary oil producer.
Kuwait is planning to raise its oil refineries capacity
According to recent reports, Kuwait is to increase its crude oil refineries capacity by 50% over the next five years, because the government is expected to promote new refineries and upgrade current facilities; thus, Kuwait will raise the production output from 2.5 million bbl/d (as of 2009) to 4 million bbl/d by 2020.
Kuwait is OPEC’s fourth-largest crude oil producer and exports most of its crude and refined products to the Asia-Pacific region.
Current crude oil prices
European markets currently show moderate falls in major oil prices:
The Nymex crude oil price, short term futures (April 2011 delivery) is traded at 102.96 USD / barrel, a 1.02 USD/b decrease or 0.98%, as of 12.31*.
The Dated Brent spot crude oil is at 114.27 USD / barrel – a 0.43 USD/ barrel decrease as of 12.41*.
Crude Oil price outlook and analysis:
The Oil market continues to deflate from the rising prices it experienced during the beginning of last week (see chart below):
Currently it seems that only a new shocker might bump up oil prices up as the day will progress.
As stated before, since oil prices are high, most of the uncertainty related with the turmoil in Japan, the war in Libya and the unrest in the Middle East is already incorporated into them. Therefore it’s likely that only a new event will adversely affect the oil market and will raise the crude oil prices.
Thus, I still speculate that crude oil prices won’t show any rapid price hikes and will moderately change with no clear trend as the week will progress.
Difference between Brent oil and WTI spread: as of the yesterday Monday, 28th of March 2011 the premium of Brent over WTI reached 10.71$/b; the average premium during last weeks was 10.97$/b. See below the chart of the daily changes in the premium of Brent oil over WTI spot oil during March. I think that we will probably continue to see the premium remaining around the range of 10-13$/b.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
9.30 – Great Britain Balance of Payments
15.30 – EIA report about Crude oil inventories
For further reading (in this site):