For investors: how much will crude oil cost?

Market Leader informed

 During the reporting week the US refineries used 80.9% of their production capacity, refining 13,8M barrels a day on average, which is 263K barrels less than during the previous week. The production of gasoline and fuel distillates grew during the week, reaching 9.2M and 4.1M barrels a day correspondingly.

Last week’s US import of crude oil made up 8M barrels a day on average, which is 96K barrels less than the week before. Over the last 4 weeks the import of crude oil has made up 8.3M barrels a day, which is 480k barrels a day less than the average value for the last 4 years. Last week the import of gasoline didn’t change and stayed at the level of 808K barrels a day. The import of distillates declined by 170K barrels a day.

During the last week the US crude oil inventories (excluding the strategic oil reserves) declined by 0.4M barrels as compared to the previous week, making up 346.4M barrels, which is above the average value for this time of the year. The US gasoline inventories declined by 3,6M barrels during the last week. The reserves of propane/propylene declined by 1M barrels while the reserves of distillates saw a 0.8M decline. The net volume of crude oil products declined 6.5M barrels.

Over the last 4 weeks the oil product supplies have reached the level 19.6M barrels a day, which is 1.4% more than for the same period of 2010. Over the last 4 weeks the average demand for gasoline has made up 8,9M barrels a day, which is 1% more than last month. The demand for distillates has reached 3.8M barrels (0.3% higher than during the same period of 2010).

 The demand for jet-engine fuel has gained 8.3% over the last 4 weeks as compared with the same 4-week period of 2010.

At the moment the main factor influencing the global oil prices is the revolt in Libya. The production of crude oil in Libya has declined by half because of the violence and unrest in the country, the Libyan National Oil Corporation (NOC) reports. The main reason is the outflow of the main foreign oil experts. The unrest has already declined the oil production volume by 700-750K barrels a day. Previously Libya was the world’s 12^th biggest oil exporter, supplying the global market with more than 1.6M barrels a day.

Saudi Arabia has recently decided to increase the oil production volume approximately by 8% up to 9M barrels a day in order to make up for the lack of the Libyan export. The current production volume in SA is at the record-high levels of 2008. Saudi Arabia is the only country capable of instantly transferring such big extra volume of crude oil.

On Thursday the crude oil prices grew because of the unrest seen in the Middle East and some decline in the volume of the US reserves. The price of the April WTI futures at NYMEX gained $0,71 reaching $102,94/b. The price of the April Brent futures in London gained $0,26 reaching $116,6/b.

On March 2^nd the price of the OPEC Reference Basket of crudes increased by $2.57 (or 2.4%) up to $110,84/b. In February the average price of the OPEC oil was $100,29/b. It should be noted that in 2010 the average price of the OPEC oil was $77,45/b, in 2009 - $61,06/b. The record price of the OPEC basket of crudes was set on July 2008 - $140,73/b.

According the Department of Commodity Trading, Masterforex-V Academy, the upward tendency will continue. In the light of the current tension in Libya and other fundamental factors, both Brent and WTI types of oil are expected to see further growth. The rally is expected to have some slight corrections, depending on the news background as the crude oil market is currently very sensitive about the news from the Middle East (any positive or negative piece of news instantly causes major market changes).

 

 

 

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