Crude oil continued to decline this morning down by 14 cents to trade at 92.16. Speculators will be surprised if oil breaks below the 92 price. Lower oil prices will help the global recovery easing costs to consumers and to businesses. Nymex crude oil prices declined around 1.5 percent yesterday on the back of rising trend in US crude oil inventories which has gained for 10th consecutive week. Further, US crude production rose by 45,000 barrels a day to 8.02 million and it is at the highest point in the last 25 years which exerted downside pressure on the prices. Current prices are below the EIA expectation earlier this year before the Middle East conflicts, when the EIA was forecasting an average price around 93.00 which it revised upwards after oil held over the $100 level after problems in Egypt, Libya and Syria pushed prices. The strong decline might pull prices down on the average to the EIA estimates. Weakness in the DX coupled with upbeat market sentiments could not provide respite to fall in oil prices. Crude oil prices touched an intra-day low of $92.18 and closed at $92.29 in yesterday’s holiday trading session. Crude oil prices fell on Thursday and are on track to decline for the third consecutive month as rising crude stockpiles in US and optimism over the nuclear deal between Iran and the western nations has kept oil prices under pressure.
The OPEC members are likely to keep crude production quota unchanged at the meeting on December 4, while OPEC oil exports are expected to increase by 3% from current levels in December. Crude oil prices are expected to move down as all time high crude inventories in US and increased exports from OPEC is likely to put pressure on prices. Brent oil is trading at 110.87 down by 6 cents this morning with the spread widening to over $18.00 which is becoming worrisome for traders. Despite the decline in international oil prices, there is going to be no cut in the month of December, said Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi yesterday. While addressing a meeting of the National Assembly Standing Committee on Petroleum and Natural resources chaired by Bilal Ahmad Varik, Abbasi also criticized the Oil and Gas Regulatory Authority. He said that the mandate of the regulator was to safeguard consumer interest and to work as a regulatory body as he expressed ‘concerns’ regarding the way Ogra was functioning. Meanwhile, talking about the price fluctuation, the minister said it was going to remain stable. On another note, Abbasi said that the Iran-Pakistan gas pipeline project had been delayed due to political transition in the two countries. “However, it is back on track once again,” said Abbasi. “The EPC contractor and financier were the key issues in this project and these would be settled in the near future.”
U.S. natural gas futures rose to a five-month high boosted by cold weather outlook for coming weeks and prices are expected to move further up today trading at 3.925 easing this morning by 9 points after hitting a recent high. Heating oil climbed 37 pips as the cold conditions continues across the US trading at 3.0394. Gasoline prices are in the green at 2.6946 this morning.