WTI oil futures end under $82, a bullish end to 2010?

WTI oil futures end Friday’s trading session back under the $82 mark and has traders and investors wondering about what direction oil prices will take in the last month of 2010.

WTI Oil Futures – Closing Price

US Light oil futures for January 2011 delivery closed the week at $81.96 a barrel on the NYMEX, which is $2.92 a barrel lower than the previous week’s closing price of $84.88 a barrel. Oversold?

US Oil Inventories Down Again

Oil traders received a bullish report on Wednesday from the US Department of Energy showing big falls in US crude oil and fuel inventories, but the announcement failed to move oil futures higher.

Crude oil supplies in the US remain at above average levels, a fact that has kept oil prices restrained.

Oil Price Forecasts for the end of 2010

Traders and other experts are still forecasting that both WTI and Brent oil prices will rise sharply in the coming months on the back of stronger oil demand from China and fresh speculation from hedge fund investors, however events in the last two weeks have seen oil prices falling.

Analysts at investment bank JP Morgan had recently raised their forecast for fourth quarter ICE Brent crude oil futures to $88 a barrel from $83.

Also, Goldman Sachs, one of the biggest commodities dealers in the world, is even more bullish on oil prices. The bank’s oil experts have recently predicted a rise of up to $100 a barrel in crude oil prices by the end of 2011. Goldman believe that oil prices will jump as global stockpiles begin to fall.

With five trading weeks left until the end of 2010, oil prices would have to take off again in order to match these recent forecasts and as per usual, the US dollar will be playing a big role in future oil price direction.