Home » Daily Oil Prices » Daily Oil Prices 18 Jan 2011

Daily Oil Prices 18 Jan 2011

crude oil trading

WTI Oil Chart 18 Jan 2011

Buoyant equity markets and a weaker dollar are helping to keep crude oil prices well bid as they move inexorably towards the $100 per barrel target. The daily oil price chart has now seen the WTI contract consolidating in the $90 to $92 price region with the Jan 3 high of  $92.56 the most immediate short term target.  In yesterday’s trading crude oil futures initially dipped on the back of a stronger dollar and on news that the Trans-Alaskan pipeline is due to return to service.  The commodity had experienced 5 consecutive positive trading sessions on stronger US data and on a rapid increase in energy demand from China, the second biggest user of crude oil.  However, oil prices were also boosted this morning after the IEA raised its 2011 demand forecast, citing growing momentum in the economic recovery.  Also adding to crude oil speculation was a larger than expected draw on last week’s inventories.  The EIA data reported a decline in oil stocks and above expectation increases for both gas and distillates.  Oil inventories fell by 2.2m barrels against an expected decline of only 300k barrels.  In contrast gas supplies increased +5.1m against an expected rise of +2.9m barrels, while distillates jumped +2.7m.

However, the move towards the psychological $100 target will not be straightforward for a number of reasons: first the market is not showing signs of a tighter supply and demand balance as OPEC believes that supply and demand are “in balance”.  Second OPEC expects demand growth will actually slow as the global economy may struggle later this year (despite the current positive mood in equity markets).  Third the amount of oil in storage is ample and taken together with more fuel capacity is likely to lead price resistance in the mid $90 per barrel price region.

OPEC lifts output as oil flirts with $100