Oil prices on December 29, 2011 hovered below $100 a barrel in the Asian sub continent after there were reports that US crude supplies were up last week. This also indicated that the demand for crude in US might be weak currently.
Benchmark crude ready for February delivery increased by 19 cents and reached $99.95 per barrel at the electronic trading exchange of New York, Singapore time midday. It later fell by $1.98 and settled at $99.36 in New York.
In London, the Brent crude witnessed a fall by 2 cents and was at $107.54 per barrel on the Futures Exchange of ICE.
The American petroleum Institute further reported that crude inventories increased by 9.6 million barrels last week, while as predicted by the analysts at Platts, they were supposed to drop by 2.3 barrels.
The gasoline inventories further added to 1.9 barrels while that of distillates added another 600,000 barrels as reported by the API. Another data by the Energy Department’s Energy Information Administration was yet to be revealed later on December 29, 2011.
Moreover reports from Iran about its plans to close the Straits of Hormuz in order to curb crude exports to the world affected investors’ concerns seriously. The US in response said such an action would not be tolerated at any cost, and Saudi oil ministry said that it is ready to provide more supplies along with other producers from the Gulf, if supplies get disrupted.
Energy consultant Cameron Hanover said that the US and its allies would be compelled to use military force to open the Strait, if supplies are curbed.
The game thus is about to change as the officer remarked. In case any sanctions are imposed on Iran, the US will certainly put its foot down. The next week prices are worth a watch.
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