Oils And Gas Prices Continue To Climb

Crude oil continues to skyrocket adding 18 cents this morning as the US dollar weakened. Crude Oil prices are expected to move in a range to lower for the day, as closure of US markets today would reduce the volumes and mixed bag of data coming from US and China can keep the prices in range to lower. Crude oil is trading at 100.32 while Brent oil eased by 1 point to trade at 108.95. US Crude oil futures remained in a range on Friday as poor US data and fear of unrest in Middle East kept the prices in range. U.S. manufacturing output unexpectedly fell in January, recording its biggest drop in more than 4-1/2 years as cold weather disrupted production. Positive Prelim GDP data on Friday from Eurozone also helped Crude to gain some support. Oil Speculators and Hedge funds have rapidly increased their bullish bets on crude oil.

Nymex crude oil prices gained around 0.4 in the last week on the back of sharp decline in inventories at Cushing, Oklahoma. Further, weakness in the DX coupled with decline in US distillate and gasoline inventories supported an upside in the prices. A recent report from the American Petroleum Institute showed that U.S. distillate fuel supplies fell by 1.45 million barrels last week. In reaction to the report, the price of West Texas Intermediate, the crude oil benchmark in the United States, rose to its highest level in seven weeks. Despite the fact that domestic crude oil production is ramping up, thanks to huge available resources and rapid technological advancements in oil drilling, supplies shrank anyway. The reason for this appears to be that distillate fuels, which include heating oil, are seeing strong demand because of the especially harsh winter in the United States.

Last week West Texas Intermediate came close to $101 per barrel. This represents a fairly strong rally in a relatively short amount of time. West Texas Intermediate was declining toward $90 per barrel just a few weeks ago. This means that all of a sudden, oil exploration and production companies have a strong tailwind heading into the upcoming year.

The International Energy Agency (IEA) said a pickup in demand in advanced countries, led by the United States, has more than compensated for a slowing of emerging market consumption. The IEA, energy market analysis arm of the OECD group of advanced democracies, put much of that switch down to the rebound in the United States and the tightening of US monetary conditions which has sparked turmoil in emerging markets.

Oil price support last week came also from a rise in Chinese crude imports. Chinese data released on Wednesday showed the world’s top energy consumer imported a record 6.63 million barrels of crude oil per day in January, up 5.2 per cent from December.

Natural gas prices continue their steep climb adding 212 points this morning on the weak US dollar along with additional storms blanketing the US east coast. Freezing temperatures continue to weigh on the US economy but push up residential demand for heating. On a weekly basis Nymex natural gas prices gained around 9 percent on the back of decline in US natural gas inventories. Further, expectations of rise in demand for the commodity amid cool winter weather conditions in the US supported an upside in the prices.