Crude oil price (WTI) rose yesterday despite the ongoing downward trend it experienced during 2011. Let’s examine this behavior:
The main news related to the recent changes in crude oil prices come from the US and Middle East.
In the US, the EIA published yesterday its weekly report on petroleum stocks, consumption and production pertaining last week’s figures in the US.
The report showed a decline in petroleum stocks for this first time in five weeks. This change in direction might have some affect on investors’ perceptive on the consumption of crude oil in the US, however this is pure speculation and as the EIA penultimate report on crude oil review stated: relying on this report is at the investors’ own peril, as the data present there have many noise and could fluctuate.
The second news item is related to the ongoing instability in the Middle East: after the fall of President Mubarak, there are several other countries that took the lead in trying to get rid of their dictators: the countries currently on the news include, among others, Yemen and Libya.
A related news item to the Middle East is the Iranian two warships that are scheduled to sail via Suez Canal en route to Syria. There ships could pose a threat to Israel and drive up the uncertainty in the Middle East along with the tension in the entire region.
All these news items could well be responsible for yesterday’s break in crude oil prices’ fall.
Crude oil price (WTI spot) after falling for three straight business days, it bounced back yesterday with a 2.24% increase as it settled on 84.99$/b. Yet WTI is still being traded at a low rate compare the last several weeks.
Brent spot price also inclined by 1.22% to reach 103.73$/b.
During the month of February, WTI spot prices declined by 5.1%, while Brent spot increased by 3.3%.
Here is a reminder of the top news that will be published today that might influence oil and gas prices (all times GMT):
On the news today:
13.30PM – Department of Labor report – US unemployment claims
15.30PM – EIA report about Natural gas storage
19.00PM – Report on American Federal budget balance
Crude Oil price Outlook:
The news listed above vis-à-vis the Middle East instability, might affect crude oil price and drive it up in the short run, probably more for Brent oil than WTI, as we have seen during February and the Egyptian’s riots effect on oil prices.
Nonetheless, as long as no country in the Middle East will engage in any actual and direct provocation and the Suez Canal remains open, with no apparent cause for alarm that commodities will be held there, then the recent rises in crude oil prices will probably subside, and sans any other breaking news, we should probably see an ongoing fall in crude oil price.
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