Friday February 25, 2011

NYMEX crude oil prices hit $103.41 on Libya violence

reuters.com :

US crude oil futures rallied for a third session as escalating violence in Libya sparked supply worries. On NYMEX, crude oil prices for April 2011 delivery were at $100.64. It traded from $98.50 to $103.41. In London, ICE Brent was at $114.89 after trading from $111.83 to $119.79. Speculation that the Libyan unrest could spread to other big oil producers in the Middle East and North Africa again spurred buying, traders said. The violence in Libya has cut at least 400,000 barrels per day of that country's 1.6 million bpd output. The upheaval in Libya, which holds Africa's largest proven oil reserves, has ignited fears of an inflationary spike and hitting industrial commodities.

- I hadn't had the chance to say this to my friends and colleagues for a while now, but here we are : "Welcome back to $100 oil". Of course, in the grand scheme of things it may not really amount to that much, but triple-digit oil does seem to be a psychological stumbling block for many people, as in "I can't believe we're at $100 oil again". All this while the stock market seems to be doing its best to roll over and go down.

As expected some of the trading crowd has come in to fade the move and pull WTI crude oil prices back below $100 for the moment, but Brent crude oil prices remain strong and long, staying above $100. The spike up has been short and sharp so far with most pinning it on the events in Libya, and much of the concern has been about a contagion effect spreading to the ultimate king-pin of them all, Saudi Arabia, in which case it would be a short and sharp trip to $200 oil and beyond. But so far that hasn't happened yet. So in the meantime I would probably expect a consolidation and re-test of support levels around the $93 level before the next course of action.

See also :

1. NYMEX crude oil prices surge above $86 to 17-month high on economic recovery
2. NYMEX crude oil prices fall on Spain downgrade after hitting $75.72 intra-day
3. Watch China
4. Brent crude nears $99, Nymex crude oil prices hit $92 on Alaska pipeline shutdown

(2011-02-25 06:52:19 SGT) [Energy] Permalink

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