Oil Oil Oil Everywhere Oil – What Will OPEC Do ?

Crude oil is trading at 94.19 up by 9 cents today. Oil has steadily gained since the EIA inventory report on Wednesday afternoon.  WTI rose 1.7 percent on Jan. 15, the most this year, after government data showed U.S. crude stockpiles shrank to the lowest level since March 2012 in the seven days ended Jan. 10. Futures decreased the past two weeks amid rising fuel inventories and weaker demand.

Brent oil eased to 105.53 down by 5 points after OPEC which is responsible for 40% of the world’s oil supply said production from its 12 members slid by 20,000 barrels a day to 29.44 million a day in December amid output losses in Iraq and Saudi Arabia. That’s less than the average 29.6 million a day the group predicts will be required in 2014 and below the 30 million ceiling it reaffirmed last month. The Organization of Petroleum Exporting Countries said it pumped the least amount of oil since May 2011. The need for OPEC oil will decline by 300,000 barrels a day from a year earlier as producers led by the U.S., Canada and Brazil increase supplies, the group said in a report today. Futures fluctuated for most of the day after the Labor Department reported that fewer Americans filed applications for unemployment benefits last week. Non-OPEC production continues to soar, and with global demand rising not at the same pace, OPEC will have to cut production. U.S. output climbed to 8.16 million barrels a day in the week ended Jan. 10, the highest level since July 1988, the Energy Information Administration reported yesterday. Output surpassed imports in October for the first time since 1995, the EIA said.

Europe is days from suspending a ban on reinsuring tankers hauling Iranian oil, a measure that helped cut the nation’s crude exports by more than 50 percent when it was implemented. The six-month relaxation starts Jan. 20 and will allow companies following European Union law to reinsure tankers shipping Iran’s oil to India, China, Japan, South Korea, Turkey and Taiwan, an EU official told reporters in Brussels today, speaking on condition of anonymity because he wasn’t authorized to be quoted by name.

Heating oil climbed by 3 points to trade at 2.9899 along with gasoline slid to their lowest level in two months on signs of continued weak demand as wintry weather keeps drivers off the road. Reformulated gasoline blendstock, or RBOB, settled down 3.13 cents, or 1.2%, at $2.5951 a gallon, the lowest settlement price since Nov. 12. Gasoline stockpiles rose by 6.2 million barrels last week, the U.S. Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal had expected a 2.3-million-barrel increase. Gasoline inventories as of Jan. 10 stand at their highest level since February.

Natural gas is trading at 4.363 down by 7 points this morning as traders booked profits. U.S. natural gas futures closed slightly higher on Thursday, but were down from a near record rally earlier in the day as data showing the drawdown in storage during last week’s arctic temperatures disappointed analysts’ expectations. Traders can expect Natural gas prices to move lower for the day as lower inventories by EIA was already factored in the prices and expectation of milder weather next week can pressure the prices.