Brent oil price surges in record trading, next stop $90?

14 April 2010 14 April 2010

BonTrade

Brent oil prices took off on Wednesday in a record trading session with a barrel of ICE Brent crude oil futures at fetching $86.04 on the ICE Futures Exchange.

Yesterday, a record 2.5 billion barrels of crude oil traded on April 13th 2010 on the world’s two main futures exchanges (ICE and NYMEX), the equivalent of almost 30 times the amount of oil used around the world each day, data showed on Wednesday. Today was shaping up to be just as busy for oil traders, investors and speculators.

In London, a further 1.1 million contracts traded, comprised of both US crude and Brent crude oil futures, the benchmark for much of Europe, Africa and Asia. The volume of US crude oil futures traded in London was also a record for the ICE Futures Exchange.

The record volume on both futures exchanges includes contracts both for physical delivery in May and far in the future although the majority of the trades were on contracts for next month and June.

“A decline in crude stocks and a bigger than expected drop for gasoline stocks coupled with a weaker US dollar and global equity markets rallying puts a bullish backdrop firmly in place, and a run to $90 oil prices and beyond is likely,” said Chris Jarvis, senior analyst, Caprock Risk Management, in Hampton Falls, New Hampshire.

Oil is likely to soar above $90 per barrel on returning demand for trucking and shipping fuels this year, according to Hermes Commodities.

Any further rise in oil prices, which are up almost 70 percent from a year ago, could dismay consumer countries and feed into higher energy costs for businesses and consumers at a time of fragile economic recovery.