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OilPrice.com Weekly Oil Market Update: 01/11/2010 - 01/15/2010
Zero Hedge is happy to commence providing a new weekly recap of the oil market courtesy of OilPrice.com. Originally published at http://www.oilprice.com/article-oil-prices-fall-as-winter-premium-melts-away.html
Crude oil futures fell for five straight sessions as warmer weather in the U.S. dispelled forecasts of unusually low temperatures and allowed concerns about demand to come to the fore. The price for Nymex’s West Texas crude fell about 6% during the week, starting at nearly $83 and finishing at $78.
Analysts said that the unusually cold weather had supported prices with a “winter premium,” as added heating demand compensated for lower demand in transportation due to slow economic recovery.
Even a report early in the week that China’s energy imports had registered a big jump in December failed to help, as it was quickly followed by moves at the Chinese central bank to tighten credit and slow down economic growth.
Further bearish news came on Wednesday with the report that U.S. inventories of crude oil had risen by 3.7 million tons in the week, three times more than expected.
Then the coup de grace came on Friday as the International Energy Agency failed to raise its forecasts for global oil demand in its monthly oil report, saying that the cold weather wasn’t sufficient to increase demand projections.
“Oil demand recovery in the OECD will likely remain sluggish, despite a bout of recent cold weather,” the agency said.
Even so, U.S. industrial production figures for January posted their sixth straight increase on Friday, coming in slightly higher than expectations at 0.6%, and this helped trim some of the losses on the crude contract.
Some analysts found comfort in the fact that the decline in crude prices was not greater, seeing this as a sign of resilience. Goldman Sachs reiterated its forecast that West Texas crude would average $90 this year and rise to an average $110 in 2011. The bank said demand from emerging economies would make up for the sluggishness in the industrial countries.
The IEA echoed this sentiment in its report. “Growth is driven by non-OECD countries, most notably in Asia,” the IEA said.
A move by the U.S. Commodity Futures Trading Commission to impose position limits had no impact on trading. The proposed limits are generous enough that only the very biggest traders will have to pay attention to them, analysts said.
Heating oil and gasoline prices trended down with crude. Natural gas benefited from bargain hunters on Friday to claw back some of its losses for the week, ending up for the day.
This article was written by Darrell Delamaide for Oilprice.com who focus on Fossil Fuels, Alternative Energy, Metals, Oil Prices and Geopolitics. To find out more visit their website at: http://www.oilprice.com
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I find it interesting that with the dollar rallying, crude collapsing for the 5th day, and stocks under pressure on Friday, the OSX hardly budged, and big cap oils like COP and mid caps like CHK were actually up on the day.
The oil service is starting outperform the commodity, usually that is a bullish sign..
great analysis, Robo.
much more substantive & actionable than the headline recap above.
Some little guys to keep your eye on....
http://www.nbcnewyork.com/news/local-beat/Security-Breach-at-JFK-Forces-...
Warm weather???? WTF??? It's been freezing in FLORIDA!!!
Watch out for falling iguanas!
Warm weather or cold weather,oil will not be allowed to pass the $80 threshold,for fear of chalking up whatever left from the economy. Current prices are purely speculative in my opinion,and shouldn't be that high. But GS and company always have the final say. But,it only take a small ignition,and the FED loses control to see oil jumping up,and we see a repeat of last year economic collapse. Right now banx are a bit weary of preasure on multi front,once the public forgets about them,look for last year's performance...
For more information with perhpas less passionate, uninformed opinion, ZeroHedge will do well to recommend and link to
"The Oil Drum" ...
http://www.theoildrum.com/
My own experience was to recognize the US credit crisis and the oil problem at about the same time about 10 years ago.
I don't see any way to establish "cause and effect" in either direction but believe that the two problems are intrinsically linked ... and both point to Zero in roughly the same time frame ... so I'm delighted to find this reference here ...
-chiz
is that why gas is like 2.80 in fuckin NH?
i was never a fan of anal, and believe me when i tell you that it doesnt make it any easier to take that the president, house, senate AND treasury are buggering me in the poop shute. getting QUITE pissed.
OT but,
WHO DAT SAINTS!!!
Nice win, and I must say: I do like me some Bush.
I'm thinking that the price of oil has only one way to go once this bear market rally plays itself out, and that would be down due to a collapse in demand.
Having said that, a collapse in demand can, a probably will in the long run lead to a collapse in supply due to lack of investment and exploration. Then all bets are off, and the sky is the limit for oil prices.
This rally has a ways to go. No one believes me but they can keep these balls in the air indefinitely. We live in a time of "high-tech robbery and market manipulation" I see nothing on the horizon to shock the world economy enough to shake the hold these modern day "robber-barons" have on money.
Some sort of black swan event might do it, but unless its severe it won't make much difference. Short of a nuke somewhere in the world, hurricanes, earthquakes and attempted plane bombings just are not enough to shake their hold on things.
It would be a mistake to underestimate the degree to which the markets are under their control.
modern day "robber-barons" - that term has lasted for a few generations and came to be synonymous with the early 20th century characters like Astor, Carnegie, Morgan, Rockefeller, Vanderbilt et. al.
do you suppose the term "bankster" will make it into the lexicon and become synonymous with names like Blankfein, Dimon, Geithner, Paulson etc. for generations to come?
Yes.
Hey guys, help me out with this please.
Is this correct information on Marathon Oil? What happened?
http://www.cmavision.com/market-data#riskiest (top of the page)
If this was already discussed I apologize. Thanks in advance.
Per WSJ. It's deja vu all over again.
Further bearish news came on Wednesday with the report that U.S. inventories of crude oil had risen by 3.7 million tons in the week, three times more than expected.
That's just 6 supertankers. Some guys want to sell at $83 and go back and fill up <78
I was pimping out this Fib Fan way back to July 7th, 2009
http://oahutrading.blogspot.com/2010/01/just-when-you-think-this-market-...
http://oahutrading.blogspot.com/2009/07/fib-fan-1932-to-2007-peak-not-20...
http://oahutrading.blogspot.com/2009/09/dia-and-50fib.html
Now it looks like it is really in play.
http://oahutrading.blogspot.com/2010/01/spooky-fib-fans-from-great-depre...
Crude daily chart is in a downtrend but weekly chart is still bullish so far.
UPDATES:
http://www.zerohedge.com/forum/market-outlook-0
In early 2007 I warned of an impending stockmarket crash.
I confirmed a bottom by early April 2009.
In mid 2009 I warned of an impending USD rally.
The uptrend since March 2009 has been a bear market rally contained within a much larger bear cycle that started in 2000.
All markets may be affected.
The world is awash in oil, every storage tank on land is full and oil tanker rates rose recently since most tankers are anchored, full of oil, in every port where there is a refinery.
http://seekingalpha.com/article/179644-oil-inventories-working-their-way...
Oil goes up only because GS wants it to.
The rise in commodities is just as much BS as HFT.
Another form of oil manipulation? See article on the new ETF's
http://www.atimes.com/atimes/Middle_East/LA16Ak02.html
Well the weather down in Florida has warmed up nicely over the past couple of days. Can we attribute this to the monster of a sun spot that erupted over the past week?
http://www.spaceweather.com/archive.php?view=1&day=14&month=01&year=2010
Or maybe Al Gore opened his big mouth and a lot of hot air escaped.
What would be cool is if Obama put our emergency oil reserve to work to get the price of crude down, by just stepping in at the right time to beat the speculators. Get crude down to the $40 per barrel mark and keep it there by manipulating futures and inventory. Its doable in the short term. The economy is hurting, so lower energy costs would help.
With a move like this, at least the average family would save money on their gas bills for the up coming year. This could be a good political move for the November elections.
Just a thought.
Mark Beck
Looking from a distance from where I´m, here in Denmark, it appeared to me since the "rescue programs" began that your president doesn´t work for you (the American people),..AT ALL!
M. Copenhagen