Brent oil price falls under $97 on Saudi forecasts for 2011

25 January 2011 25 January 2011

BonTrade

Brent oil prices open Tuesday’s trading session back under $97 a barrel as Saudi Arabia’s oil minister forecasts that 2011 oil futures should remain unchanged from last year’s price levels.

Latest Brent Oil Price

In London, Brent crude oil futures for March 2011 delivery was trading at $96.59 a barrel, 07.45 GMT this morning on the ICE Futures Exchange.

Saudi Arabian Oil Minister Ali Naimi said Monday that the world has “clearly passed” the economic recession of 2008 and 2009, adding that prices will remain stable compared with 2010.

OPEC and Oil Output in 2011

Ali Naimi said that OPEC may increase production levels to meet growing demand in 2011, expecting oil demand to grow faster than previously expected this year as the economic recovery gathers pace.

“Some of the nervousness about the Saudi oil minister’s statements seems to have prompted additional liquidation.” said Gene McGillian, broker and analyst at Tradition Energy.

However, some analysts said Naimi’s comments didn’t necessarily mean that OPEC would increase oil supply. “We think these tea leaf readers may be reading too much into a comment that might have meant little. If the Saudi’s wanted oil prices lower, they would be clearer in saying so.” said Peter Beutel, president of Cameron Hanover.

Market Taking Profits

“Crude oil prices had a reasonably good run toward the end of 2010 and possibly rose a little stronger than justified. The market may just be taking profits off a short term rally.” said Mark Pervan, head of commodity research at ANZ, Melbourne.