WTI oil trading at $104, Middle East still driving oil prices

29 March 2011 29 March 2011

BonTrade

WTI oil futures open Tuesday’s trading session back around $104 a barrel as tensions in the Middle East are still seen as the main driver for short term oil price direction, keeping US Light crude oil prices floating over the $100 mark.

Latest WTI Oil Price

US Light crude oil futures for May 2011 delivery was trading at $103.84 a barrel, 06.30 GMT this morning in electronic trading on the NYMEX.

With oil prices holding above triple digits for more than a week, any signs of increasing oil exports out of the Middle East could help lower crude oil prices. But continued unrest across the Middle East and North Africa has kept investors wary of betting on a significant drop anytime soon.

US Fed Policy and WTI Oil Prices

Meanwhile, US Federal Reserve officials have begun to hint that the US central bank may soon end its stimulus efforts. US Federal Reserve Bank of St. Louis President James Bullard said Saturday that it could be a good idea for the Fed to end its quantitative easing program earlier than planned given a strengthening in the US economy.

“One of the major reasons why oil prices are above $100 a barrel has been Fed policy. You can’t underestimate the impact should they start to take that away.” said Phil Flynn, oil analyst at PFGBest.