Thursday January 13, 2011

Brent crude nears $99, Nymex crude oil prices hit $92 on Alaska pipeline shutdown

channelnewsasia.com :

Oil prices rallied for a third straight day on Wednesday [12 Jan 2011], climbing in London to more than two-year highs, as the key Alaskan pipeline remained shut following a weekend leak. NYMEX crude oil prices, which gained nearly $4 since the beginning of the week, rose as high as $92.39 in trading during the day. In London, Brent North Sea crude oil futures for Feb 2011 delivery settled $98.12, peaking earlier at $98.85, the highest level since early October 2008. Prices pushed higher after the US Department of Energy reported American crude stockpiles sank by 2.2 million barrels last week. The decline was sharper than expected, suggesting stronger demand. The 1,300-kilometre Trans-Alaska Pipeline, which carries about 12% of US production, was shut down after a leak was discovered on Saturday.

- So we didn't get back to $100 oil on the first trading day of the new year like we did back in 2008. But we'll see if oil manages to hit the magic triple-digit level some time within the next 3 months, now that the commodities trade seems to be back in fashion since the past quarter or so.

Besides the Alaskan pipeline, a number of factors conspire to push oil towards upcoming news headlines proclaiming "$100 Oil is Back". The USD as usual being issued at high speed. Another front in the currency wars opening up at any time. The price targets, unofficial or not, of OPEC being stated as shifting from "being comfortable with $85" to "being comfortable with $100". Oil on the charts finally breaking out of consolidation, away from a massive triangle formation, and pushing through resistance levels around $87 to $90. The global economy supposedly on the mend, led by Asia and emerging markets. Real inflation going on, not just inflation expectations. And so on.

This should be another interesting year. Interesting as in the times we live in. This year we shall see if we might finally start getting used to $100 oil instead of proclaiming it as the end of the economy. Or perhaps, just perhaps, we might find out the hard way that, yes indeed, $100 oil continues to act as the natural limiting factor to economic expansion as we grind our way along the undulating plateau of peak oil.

See also :

1. Watch the Euro
2. NYMEX crude oil prices surge above $86 to 17-month high on economic recovery
3. NYMEX crude oil prices fall on Spain downgrade after hitting $75.72 intra-day
4. Watch China

(2011-01-13 23:35:21 SGT) [Energy] Permalink Comments [1]

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