Crude oil prices in 2012: A quick review

The International Energy Agency has recently released its official projections for the path crude oil prices will take in 2012, and though the reports were riddled  with pessimistic expectations and grim geopolitical factors, crude oil price charts do possess several underlying lines of support that stand the chance of shifting forecasts into positive territory.

An unstable economy in the US, and a downright struggling on in the European bloc may spell grim results for crude oil in the new year, yet falling supplies and persisting political disputes have already proven themselves capable of reversing the negative trend, with both Brent and West Texas Intermediate figures standing comfortably above the $100 per barrel mark.

With the sanctions against Iran now approved by the European Union, it now looks like Iranian oil will soon be completely removed from the West, Europe and Asia. Though both China and India have expressed an interest in purchasing whatever oil Iran fails to export elsewhere, the embargos will still present many large nations with supply issues, ones that are sure to bolster crude oil prices on the charts. Saudi Arabia’s proposal to make up for Iran’s stalled production however could even out the spread. OPECs reduced spare capacity is still at play here, and further drops will likely keep futures up for the first quarter.

Nigeria’s lingering internal disputes and hostilities are also threatening to undercut the nation’s 2.5 million barrel output. Africa’s key crude player is currently riddled with quarrels regarding abandoned fuel subsidies and general instability.

South Sudan’s announcement that it plans to halt all production of oil may also affect crude oil price charts. The statements out of the region come as backlash against accusations that Sudan has been seizing product from the southern territories.

President Obama’s expected rejection of the crucial Keystone XL pipeline will also play a huge role in dictating what paths crude oil will take in 2012. The ambitious pipeline was expected to boost crude oil prices to considerable heights, as it would have effectively removed oversupply issues in the US.