Current Crude Oil Prices Mixed in London Trade
Oil prices in London trading were mixed with the prediction of several analysts of an improving long-term forecast in prices, while other analysts cautioning the presence of contingencies.
During morning trading, Brent for March delivery was 34 cents higher to a crude price per barrel of $112.05.
On the NYMEX, the price of the U.S. benchmark crude for delivery in February was lower by 5 cents to $95.51 per barrel.
Oil analyst Alexander Poegl of Vienna-based JBC energy said that the market is generally on the bullish side, adding that the company has maintained the same stand over the previous year.
The demand for oil is rising, with Asia as the main driver, according to the upward revision on the recent demand projection of the IEA. The agency increased its forecast for global daily oil demand this year by 900,000 barrels to 90.8 million barrels.
In terms of supply, the market can look at typical factors including the election season in Iran and in Israel, said Poegl. The analyst added Sudan, Algeria and Syria to the list as potential flashpoints, with the latest one being a siege at an energy complex resulting in the killing of almost 38 hostages, based on recent reports.
But, Poegl concluded that the trend of the oil prices would be mostly positive throughout this year.
However, the optimistic price outlook is not matched by all commentators in the market. According to some reports, the forecast for the Brent price has been slightly exaggerated. They cite the fact that the bullish rally for the New Year has not been able to significantly push the price of Brent higher. As a result, even minimal challenges to sentiment will once again set the European benchmark crude testing downside movement to $105 a barrel.
Saudi Arabia, the biggest producer of oil in the world, reduced its production in quarter four of last year by 600,000 barrels daily. Market analysts are still skeptical if the Kingdom will make all the required cuts in quarter one of this year. The analysts wrote that Saudi Arabia must double the output reductions it made in quarter four of 2012 to make sure that the market is balanced in quarter one of 2013.
Overproduction from OPEC and/or the U.S. may pull down crude futures prices by flooding the market with additional supply.
Meanwhile, the gasoil contract for delivery in February was $8.25 higher at $972.75 per metric ton. On the NYMEX, gasoline for delivery in February was 41 points higher at $2.8009 per gallon.