Category: Oil prices

There are a number of reasons why a consumer would want to keep an eye on the latest oil prices. Everyone has to heat their homes and the correct timing of buying your heating oil can be costly if you get it wrong.

Oil prices have a habit of fluctuating a lot due to weather conditions. When cold weather hits and temperatures begin to drop, oil prices can quickly respond to this change. This is especially true when we have seen a long summer and gasoline consumption has been on the increase. Due to this seasonal effect refineries can and do put oil production on hold so they meet these demands. When lower temperatures arrive and heating oil demand increases, so will the associated oil prices. Homeowners do need to follow oil prices online to watch for these seasonal changes.

About Investing in Crude Oil

There are a different set of people who need to watch the latest oil prices, this group are investors. Whilst crude oil investors have a real need to watch current oil prices, many investors who are involved in other related industries have a similar need. Our oil consumption has huge influence on large numbers of industry sectors. Petroleum is used in the manufacture of plastic, chemicals, and not forgetting the fuel that is consumed by large fleets of vehicles these companies run. Almost anything that depends on petrol is affected by severe changes in oil prices.

Planning expenditure

An abundance of positive economic data during the week have helped the strength of the dollar, subsequently stalling the rally for oil prices.

April futures for crude oil prices were at $81.71 Friday (March 19). This is down from Thursday’s settle price of $82.20 on the exchange, and Thursday’s settle price was 73 cents below Wednesday’s too

What is prompting the recent slide? It could be due in part to simple correction given that crude oil prices are up about $14 from $69 about a month gone. Speculator expectation for increased demand in the coming months from businesses and consumers helped fuel much of the gains.

The strong dollar can also be part of the reason oil prices were kept in check this week. Generally, a strong dollar favors lower commodities. However, oil has moved more in unison with equities and economic sentiment in the last year, sometimes shrugging off dollar improvements.

Many analysts have been saying recently that speculators have already priced in much of the anticipation for increased demand for the latter half of 2010. The implication is the actual event of increased demand may not necessarily drive oil prices much beyond their current point.

The dollar appears to have some significant upward potential in the coming months as economic sentiment improves and it becomes more likely that the Fed will increase interest rates. Higher yields would make the dollar more valued as a speculative interest.

Of course, traders have also been factoring this potential in currency trade. Recent comments following the Central Bank meeting which ended with rates being held at low to zero suggest it could be a while before rates are moved. This has kept the dollar speculation from really taking off.

An Inventory report on the level of crude supplies was released by the Energy Information Administration this morning and pushed Crude oil prices to a brief new high for 2010. The Oil price then reversed the rise during the day.

The price of a barrel of crude for April delivery reached as high as $83.03 early Wednesday morning as speculators applauded the new data that showed a 1.4 million barrel increase in crude last week for a 343 million barrel total inventory level.

Platts survey expected a report of 2.1 million barrels. The much lower than expected level of inventory triggered an immediate upward rise in trade, the lower than expected number was seen as a sign of increased demand.

Analysts were quick to point out that despite the smaller than expected inventory, crude levels are still very high for the current oil price point. Speculators seemingly agreed as after the run up to $82, oil prices reversed back in the later morning of the New York session to close Tuesday’s settle price of $81.50.

The world’s largest oil producing and exporting countries collectively known as OPEC, believes a stronger and stable economy for the rest of 2010 should lead to an increase in demand of around 900,000 barrels of crude oil a day.

OPEC would prefer that oil prices remain at current levels, or go even higher. However, real data continues to suggest modest demand in oil-based products in the US. Business and consumers are still hesitant to begin traveling and transporting at pre-recession levels. Without significant gains in US oil demand, it is hard to imagine OPEC’s forecast would hold true.