There is positive growth for West Texas Intermediate which is trading near the highest price since October amidst the news that demand building up and that causing depletion in inventories in the U.S., the world’s biggest oil consumer. Also, the positive indications in the employment front in the U.S. economy are helping the crude get better prices.
The demand for oil has gone up and according to market observers it has started to surprise the upside in the U.S. and Europe and that are why the WTI crude prices are up. They also admit that as winter season begins, the demand for oil will increase to some extent and that may lead to higher consumption.
According to an estimate from the International Energy Agency global oil demand in 2014 amid an economic recovery in the U.S. Futures were little changed in New York. It rose 1.2 percent yesterday and expected to do well. Additionally, as crude stockpiles shrank by 7.5 million barrels last week, it is expected that prices may get a boost.
Even a government data shows that supplies dropped by 3 million; in electronic trading on the New York Mercantile Exchange, January delivery for WTI crude was at $98.54 a barrel.
On the other hand, the contract in London climbed $1.17 to $98.51 which is the highest close since Oct. 28.
Brent for January settlement was without a momentum as it fell 11 cents at $109.27 a barrel on the London-based ICE Futures Europe exchange. According to the IEA forecast, monthly oil market report tells that world demand will increase by 1.2 million barrels a day and that may give impetus to the oil prices.
Similarly, U.S. fuel use is going up; it in fact, rose above 20 million barrels a day in November for the first time since 2008. It helped WTI advance 5.3 percent last week which is the most in five months after the news that the U.S. crude inventories fell for the first time in 11 weeks. Earlier, the increase in the inventory led to the collapse in oil prices.
Libya has been a weak link in the oil production since the fall of Kaddafi government. In fact, disruptions in Libya led to a fourth monthly decline in supplies from the Organization of Petroleum Exporting Countries. However, as negotiations are going on, some oil fields may start producing oil soon.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org