US WTI crude oil opens Tuesday’s trading session nearing the magic $100 a barrel marker just as banking giant Barclays comments on the volatility of crude oil futures, suggesting that prices could well rise again from here.
Latest WTI oil Price
US Light crude oil futures for August 2013 delivery was trading at $98.20 a barrel, 08:22 GMT this morning in electronic trading on the NYMEX, or 0.3 percent higher. WTI crude rose $1.43 or 1.5 percent, to end at $97.99 a barrel on Monday. WTI crude oil futures have been stuck between $90 and $98 a barrel for most of the past six months.
Barclays Oil Price Forecast
Barclays believe that the oil market has become too complacent and greater volatility may be on the way for oil prices.
“We think now is an appropriate time to buy medium-term (three- to six-month) options on WTI futures, for a few reasons,” say analysts at the bank.
First, the market may come to perceive that any Fed tightening is damagingly premature if it is based on an improving labour market at a time of softer economic indicators elsewhere. Second, euro zone woes may return. “If the past episodes of risk flare in the euro zone are anything to go by, there is massive room for oil volatility to appreciate.”
Middle East Tensions
Meanwhile, oil investors are once again keeping an eye on Egypt, where millions of protesters have demanded the resignation of President Mohammed Morsi. On Monday, Egypt’s military said it would intervene if the president is unable to resolve the crisis within 48 hours.
The turmoil in Egypt, combined with the ongoing civil war in Syria, is raising concerns about instability spreading to other areas of the oil rich Middle East which may well push oil prices higher.
Egypt’s Suez Canal is one of seven key world oil choke points, according to the US EIA (Energy Information Administration). About 4 percent of world oil moved through that choke point daily in 2011, according to the agency’s data.
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WTI oil price nearing $100 as Barclays signals “buy” for crude futures
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