WTI oil price trades back under $90 on US crude oil data

22 January 2011 22 January 2011

BonTrade

WTI oil prices ended the week back under $90 a barrel with a clear lack in short term trading direction, as the first US crude oil inventory data in weeks showed gains, helping to push WTI oil futures lower.

WTI Oil Futures – Closing Price

US Light crude oil futures for March 2011 delivery ended the week at $89.11 a barrel on the NYMEX, the fourth straight day of declines, and $2.55 a barrel lower than last week’s closing price of $91.66.

Oil prices fell in trading on Thursday after news of an unexpected rise in US crude oil reserves saw WTI oil futures sell off over $2 a barrel.

US Oil Inventories Higher

US crude oil inventories climbed 2.6 million barrels to 335.7 million barrels last week, according to the US Department of Energy. Experts and analysts had forecasted a drop of 900,000 barrels in the week to 14th January for the US, the world’s biggest oil consumer.

“The recent fundamentals, with large builds in oil inventories and ongoing concerns that China might raise interest rates, triggered selling.” said Sucden Financial energy analyst Myrto Sokou.

“Oil prices continue to be weighed down by the high levels of oil inventories.” said Matt Smith of Summit Energy.

“WTI has really become fundamentally detached from the global market. These high Cushing stock levels are proving more distorting than expected.” said Rick Mueller, director of oil markets at Energy Security Analysis.

WTI or Brent?

“Many of the financial players are moving into Brent because it’s easier to move around and doesn’t suffer the constraints at Cushing.” said Carl Larry, president of Oil Outlooks & Opinions, Houston.

Brent oil futures ended this week’s trading session at an $8 premium to the WTI NYMEX contract, the widest price gap since February 2009.