Author: SondraHunter

The price of WTI oil remains at one month highs in trading this morning, as US oil prices near $85 a barrel with latest data from the US API (American Petroleum Institute) showing that inventories of US crude oil declined 3.8 million barrels the week ended 7th October.

Latest WTI Oil Price

US Light crude oil futures for November 2011 delivery was trading at $85.02 a barrel, 06.00 GMT this morning in electronic trading on the NYMEX. The US contract closed yesterday’s session at $84.80.

The API report comes ahead of a more closely watched report from the US EIA (Department of Energy’s Energy Information Administration) where analysts expect the EIA to report a decline of 300,000 barrels, due later today.

Higher Oil Prices

US crude oil has spent two days now trading around $85 a barrel, after weeks of extraordinary volatility that saw both a one month high and a one year low. With crude oil climbing more than $10 a barrel, or 13 percent, over the last week, analysts said the market was absorbing its gains before deciding on its next direction.

“Since crude bottomed at just under $75 just a little over a week ago, it went straight up and we had some pretty big moves there. Sometimes after a big move the market will consolidate and try to figure out its next move.” said Tom Bentz, director of BNP Paribas Prime Brokerage.

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WTI oil price hangs at $85 as US API oil data returns negative

Financial markets strengthened further amid expectations that EU finance ministers will deliver plans to resolve the sovereign debt crisis. Sentiment was lifted after European Commissioner Barosso’s comment that ‘reactive and piecemeal responses to different aspects of the crisis are no longer sufficient’, sparking hopes that the new measures will be effective. Oil prices fluctuated with WTI crude posting modest loss while Brent crude gaining for a 6th consecutive day.

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Oil Fluctuates as Demand Outlook Mixed

Some OPEC member countries have begun to sound alarm bells on lower oil prices, suggested the need for an emergency OPEC meeting if oil prices slip to $85 a barrel, or even $90 a barrel, with the OPEC governor of Iran, saying OPEC should consider an emergency meeting if prices continue to fall.

“If there is a downward trend for a longer period, we should think about an emergency meeting.” Iran’s OPEC governor, Mohammad Ali Khatibi said. He declined to offer specific a floor price that should prompt a meeting.

But others are starting to put a firm floor on the price they will deem unacceptable. “Some OPEC member states have already started bilateral consultation on slipping oil prices.” an Iraqi oil official said.

Libya and OPEC Quotas

Meanwhile, OPEC member countries which boosted oil production to compensate for the loss of Libyan supply earlier this year must reduce output as Libya returns to world markets, Khatibi said on Wednesday.

Khatibi, said the continuing global economic crisis would have a negative effect on oil demand.

He predicted that Libya would soon be exporting some 400,000 to 500,000 barrels per day of crude and called on OPEC producers to rein in oil output.

“When oil demand falls and supply remains the same, oversupply can affect prices and it is necessary to manage the supply.” Khatibi said.

Saudi Oil Output nears 10m

Several OPEC members boosted oil output in recent months as oil prices rose and as the uprising in Libya slashed Libyan production from close to 1.6 million barrels per day to virtually nothing.

Saudi Arabia accounted for the biggest increase in oil output and is currently pumping around 9.8 million barrels per day, or 1.8 million barrels per day more than its normal quota.

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Lower crude oil prices sees OPEC member countries sound alarm bells

Wall Street advanced more than +1% as led by another strong day for European bourses with the Stoxx600 soaring +2.7%. Both the ECB and BOE announced measures to add liquidity to the market and to stimulate growth. US data showed more signs of life ahead of the non-farm payroll report. In the commodity sector, the front-month contract for Brent crude jumped to a 1-week high of 105.88 before settling at 105.73, up +2.92%, while the equivalent contract for WTI crude jumped +3.65% to close at 82.59. Gold managed to climb high despite improved market sentiment.

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Central Bank Easing and Recapitalization Plan Boost Optimism

The euro remains weak against the US dollar, helping the ICE Dollar Index to remain near 80 after speculation a slowing EU economy may prompt the ECB to cut benchmark interest rates at a meeting later today.

Dollar Index – Latest Rates

The ICE US Dollar Index, which tracks the US dollar against six major world currencies was little changed at 79.315 from yesterday’s close of 79.385.

The Dollar Index rose after US Fed Chairman Ben Bernanke signaled willingness to step up measures to spur US growth.

Meanwhile, the euro also fell against other currencies yesterday as Moody’s said European countries with debt ratings below the top Aaa level may see their creditworthiness reduced.

To add to the strength in the US dollar, the ECB may well look to cut eurozone benchmark interest rates in their monthly meeting later today.

“We’re seeing the market go back to its default euro bearishness. The market is focusing on the possibility of rate cuts. There’s enough angst circulating in the eurozone for people to think there might be a 25 basis point cut.” said Elizabeth Gregory, a market strategist in Geneva at Swissquote Bank SA.

A stronger US dollar helps push back high commodity prices, of which oil and gold are the main stars of the market.

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US Dollar Index remains strong as Euro debt concerns persist

Brent oil futures open Thursday’s trading session at around $103 a barrel, capping several days of losses, however oil prices remain on a possible downward slope if stock markets continue to sell off around the world.

Latest Brent Oil Price

Brent oil futures for November 2011 delivery were trading at $103.48 a barrel, 09.25 GMT this morning on the ICE Futures Exchange.

“Crude oil prices rebounded and rose more than 2 percent, supported by a strong rebound in the stock markets.” said Sucden brokers analyst Myrto Sokou.

Stock Market Panic

The panic stricken reaction of world stock markets over the past few days reflects a growing mood that a Greek debt default will not be managed and orderly but messy, with knock on effects not just for the rest of the eurozone but for the entire world economy.

Markets have responded nervously to headlines out of Europe for weeks, fearful that a Greece default could lead to a lockup in the global financial system, similar to the one triggered by the collapse of Lehman Brothers in September 2008.

Oil prices have been tracking stock markets recently, as the European debt situation plays out.

Brent crude will trade an average 1 percent higher than yesterday’s closing price of $102.73 a barrel during the final three months of the year, according to the mean prediction of 10 analysts. Crude oil futures lost 8.6 percent in the third quarter, extending a 4.2 percent drop in the second.

“The outlook is deteriorating more and more, and the velocity is somewhat alarming. The risks to forecasts right now are to the downside, and not just on demand.” said Eugen Weinberg, head of commodities research at Commerzbank AG who predicts Brent oil prices may average less than $100 a barrel in the fourth quarter of 2011.

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Brent oil trading at $103 but prices remain on a downward slope

WTI oil futures open Thursday’s trading session back near $81 a barrel as stock markets ended yesterday’s session in positive mode and the latest data from the EIA showed that US oil stocks fell more than expected.

Latest WTI Oil Price

US Light crude oil futures for November 2011 delivery was trading at $80.73 a barrel, 09.10 GMT this morning in electronic trading on the NYMEX.

US Oil Stocks

US crude oil stocks fell by 4.7 million barrels last week, according to data from the US EIA (Energy Information Administration) compared to expectations of a figure of around 700,000 barrels.

Oil prices bounced back yesterday after falling sharply at the start of the week as demand for commodities was buoyed by reassuring comments from Europe and the US. Stock markets in Europe and the US gained and oil prices followed the march higher.

Meanwhile, Asian stock markets rallied Thursday, echoing the firm performance on Wall Street, as investors took heart from some solid US economic data and from hopes that European policy makers would step up their efforts to shake off Europe’s debt concerns.

European policymakers are trying to restore confidence in their ability to tackle Europe’s debt problems and avert another recession, which would curb demand for oil.

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WTI oil trading near $81 as markets rise and US oil stocks fall

WTI oil futures open Wednesday’s trading session back around $78 a barrel after gaining 2.8 percent yesterday, boosted by weaker US crude oil stocks data from the US American Petroleum Institute.

Latest WTI Oil Price

US Light crude oil futures for November 2011 delivery was trading at $78.11 a barrel, 07.50 GMT this morning in electronic trading on the NYMEX.

US Oil Stocks

Crude inventories dropped 3.1 million barrels last week, according to the US API (American Petroleum Institute), however a US Energy Department report today is forecast to show a gain of 1.5 million barrels.

The API collects stockpile information on a voluntary basis from operators of US refineries, bulk terminals and pipelines.

Oil prices also saw gains after the US stock market made a recovery late on Tuesday. The US Dow Jones industrial average closed yesterday’s session at 10,808.71, up 153.41 points, or 1.4 percent.

“We saw a natural rebound in the market coming from the European situation and the better stock market and that just followed through to the crude market.” said Ken Hasegawa, energy trading manager at broker Newedge, Japan.

“Oil prices remain under the sway of macroeconomic sentiment.” said strategists at Barclays Capital.

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WTI oil trading at $78 a barrel as US crude stocks weaken

WTI oil futures open Tuesday’s trading session hovering around $77 a barrel, which is the lowest price for the US contract since September 2010 as weak data and recession fears continue to drive oil prices and stock markets lower.

Latest WTI Oil Price

US Light crude oil futures for November 2011 delivery was trading at $77.16 a barrel, 07.50 GMT this morning on the NYMEX. WTI oil fell $1.59, or 2 percent lower, to finish the Monday at $77.61.

Recession Fears

In the UK, the Chartered Management Institute (CMI) said it saw little prospect of an early recovery. It called for the coalition Government to go further and faster with its deficit reduction programme to improve longer term prospects and introduce incentives to provide some growth stimulus.

Only 8 percent of the 616 CMI members polled for the organisation’s half yearly economic survey expected to see any growth in the economy over the next 12 months, and more than two thirds felt the UK economy will sink back into recession.

Meanwhile, in the US the Economic Cycle Research Institute (ECRI) notified clients that the US economy is indeed tipping into a new recession and there’s nothing that policy makers can do to head it off.

ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialised leading indexes, including the US Long Leading Index, which was the first to turn down before the Arab Spring and Japanese earthquake, to be followed by downturns in the Weekly Leading Index and other shorter leading indexes.

US Stock Markets

US stock markets closed off yesterday’s session lower for a second day in a row with the Dow Jones Industrial Average closed out the session lower by 2.38 percent at 10,653.64 and the Nasdaq finished lower by 3.29 percent at 2,335.83.

The loss on Wall Street followed sharp gains for the US dollar, with the US Dollar Index hitting a high of 79.614 late Monday. The index, which tracks the US dollar against six major world currencies, later slipped back to 79.550.

A strong US dollar tends to depress oil prices, as crude oil is denominated in the US currency.

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WTI oil trading near $77, lowest crude price since September 2010