News

January 15, 2010

After A Large New Year Rise In The Oil Price Through Speculation The Oil Price Comes Back As Analysts Again Look At Fundamentals

By Eithne Treanor

Economic data disappointed the market this week with little in place to help boost the global recovery. The dollar found some strength putting pressure on commodities but real oil demand is still low and global supply is more than adequate. With the fundamentals out of balance as we head into a traditionally slower period, the oil price hit its lowest level of the year this week and was trading below US$79 on Friday.

Consumer sentiment has been on the rise in the US but retail sales this week showed a different picture. Economic data surprised the market, with consumer spending lower for the first time in three months and a huge jump in jobless figures where analysts were expecting a decline. Demand for heating oil is also down and stocks remain high. The Energy Information Administration reported large increases in crude oil stockpiles by 3.7 million barrels.  Gasoline and heating oil stocks were also...