Brent oil trading near $123, market awaits firm direction

Brent oil futures open today’s trading session near $123 a barrel as the oil market awaits some sort of firm direction with investors and traders scratching their heads for clues on short term oil prices.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2011 delivery was trading at $122.90 a barrel, 07.05 GMT this morning on the ICE Futures Exchange.

On the one hand, crude oil prices could continue climbing if unrest in the Arab world spreads beyond Libya to other oil producing countries. Some analysts have forecasted that oil prices could hit $200 a barrel if Saudi Arabia, the world’s biggest oil exporter, is forced to cut production. But it emerged yesterday that Saudi Arabia has indeed already scaled back it’s oil output, for March at least.

Saudi Arabia’s Oil Minister said on Sunday that the global market has adequate crude oil supplies and that Saudi had produced less oil in March, believing that the oil market is over supplied at the moment.

“You don’t see a major supplier of crude make comments like that unless there’s a genuine feeling to get prices lower. If the price is too high as stimulus packages come off, you’re going to grind to a halt quickly.” Jonathan Barratt, managing director of Commodity Broking Services, Sydney.

“The market is anticipating a pick-up in volatilty. Things have been quiet in the last month, but looking ahead we’re not expecting that to continue.” said Tim Evans, an energy analyst at Citi Futures Perspective.

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Brent oil trading near $123, market awaits firm direction