Europe’s debt worries continue to affect crude oil price history
Crude oil prices circled around the $100 per barrel mark today, posting some declines and paring down a portion of their previous gains, as investors pondered the seemingly improving economic state in the U.S. and the continuously deteriorating debt situation in Europe. The fuel rose above $102 per barrel on the crude oil price chart yesterday amid reports that the Canadian Keystone oil pipeline would allow the U.S. an efficient and quick route to transport crude oil into Latin America. However, after posting a tremendous rally of over $3, West Texas Intermediate futures began fluctuating in a downward fashion on trader speculation that the advances may have been overdone and that the ongoing debt crisis in Europe would offset the leads that crude oil managed to produce.
WTI crude oil prices for delivery in December, a contract that expires this Friday, currently sit at $101.87 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil futures are currently settled at $111.45 per barrel on the ICE Futures in London, bringing the spread between the two benchmarks to just above $9 per barrel, the lowest it has been since early March.
Analysts and investors are struggling to gauge which direction current crude oil prices will take in the coming month. There are several factors which will likely play key roles in affecting the commodity oil for the remainder of 2011 and into next year:
- The rapidly deteriorating geo-political turmoil in the Middle East. Though Syria is by no means a crucial global crude supplier, the amount of tension the region has seen this year cannot be anything but detrimental to OPEC’s production and exporting rates. The swiftly escalating disputes surrounding Iran’s controversial nuclear program are also doing much in crippling the prolific group’s output.
- The soaring bond yields in several weakened European nations. Italy’s and Spain’s economic states are now teetering on the very brink of total collapse. In addition, France’s rising borrowing costs may be paving the way for the dreaded chain reaction traders fear will set off recession-like behaviour in the euro zone.