Oil prices saw an increase as benchmark U.S. crude for March delivery was up 22 cents to $97.54 a barrel at 0620 GMT in electronic trading on the U.S. Mercantile Exchange. On the other hand, Iran is going to play a major role in the global oil prices. It is participating in the financial and political carnival i.e. the World Economic Forum in Davos, Switzerland.
According to news reports attention will be global energy prices and Iran’s effort to rejoin the global trading community after years of sanctions. This is also going to affect the oil prices which are improving nevertheless as it rose 59 cents to $97.32 on Thursday. A major reason behind the increase in oil prices is that a severe cold spell is hitting parts of the U.S.
Nevertheless, a boost in the global economy is also expected to have some impact on the oil prices. Earlier, the International Monetary Fund raised its growth forecast for the global economy. The international body also said that the U.S. economy will grow better this year. The demand from China is expected to increase further this year.
Oil Stocks in the U.S. Depleting at a Healthy Rate
However, a major concern still lingering on is that the U.S. is still producing crude at an unprecedented rate. ForexMinute has earlier reported that if the U.S. continues producing the crude at this pace and the imposed export restrictions are kept intact, the oil prices in the U.S. may fall further.
On the other hand, the slight rise in oil prices is due to the deep chill blanketing which is raising demand for oil and that is leading to reduction in the oil stocks of heating oil. In its pursuit to become self-dependent, the U.S. is piling up huge oil stocks and according to IEA; this may hit the wall soon.
Nevertheless, natural gas has seen record prices of more than $100 per 1,000 cubic feet on the spot market in some U.S. regions. Whereas Brent crude, a benchmark for international oil, was up 13 cents to $107.71 a barrel on the ICE exchange in London, wholesale gasoline inched up 0.3 cent to $2.673 a gallon.
The global oil may get somewhat low if Iran starts producing and exporting its quoter of oil which looks likely as the latest indications show.
To contact the reporter of this story: Jonathan Millet at email@example.com