There are still riots in fighting in Libya, however the recent proposed that might slow down the current turmoil as news continue to come from the Middle East as the US sent two warships to the Middle East to reach Libya, while in Iran there are were violent protests, all this rose the anxiety level in the Middle East, might have affected the recent rises in crude oil price.
Let’s examine the energy market and analyze the effects of the recent news from the Middle East on crude oil price:
The turmoil in Libya continues as there are still many reports of fights in Tripoli. There were some apparent encouraging reports of a proposed peace offer by Venezuela to seize the fighting in Libya. This peace proposal is still far from being clear if it will pass, but at least seems encouraging, as Muammar Qaddafi said he is willing to accept it.
The US moved two of its warships with 2,000 Marines to the Mediterranean Sea for humanitarian assistance to the people of Libya.
For now there is still news of a significant reduction in oil production in Libya, as some estimate the oil production in Libya has fallen by 1 million b per day. OPEC members however, mainly Saudi Arabia, already stepped in and moved to compensate the loss in Libya’s oil production by increasing its oil production. In any case, there will be consequences to the oil market as analyzed by the EIA.
Petroleum stocks in the US
Yesterday the EIA published its report on petroleum stocks: It showed a fall in oil stocks by 6.5 million barrels, compare to previous week. For the complete petroleum stocks see here.
Current crude oil price
Asia markets currently start off with falls in major oil prices:
The Nymex crude oil price, short term futures (April 2011 delivery) is traded at 101.85 USD / barrel, a 0.38 USD/b fall or a 0.37%, as of 10.49 AM*.
The Dated Brent spot crude oil is at 115.44 USD / barrel – a 0.52 USD/ barrel decrease as of 10.59 AM.*
Crude Oil price Outlook and Analysis:
The effects of the Middle East turmoil continue to be one of the major contributors to the fluctuation in crude oil price.
After yesterday’s rises mainly in WTI spot price, today the market start off slowly; This current slowdown in crude oil price doesn’t mean we shouldn’t except crude oil to (possibly) increase; as long as there is high uncertainty in the Middle East there is still a chance of price increases (and falls) in the short term, and as I have stated before the volatility will play a major role here; In the mean time, unless there will be any additional news outbreaks from the Middle East, crude oil price will probably won’t fluctuate much today.
Here is a reminder of the top news that will be published today that might influence the markets (all times GMT):
13.30PM – Department of Labor report – US unemployment claims
15.30PM – EIA report about Natural gas storage
For further reading (in this site):
- WTI Oil prices passed the 100 mark – March 2
- Crude oil price in 2010 and outlook for 2011
- Oil prices soared as Libyan riots continued – Weekly recap 21-25 February
- Weekly outlook for Crude oil, Natural gas and Gold 28 Feb – 4 Mar