Crude oil remains well below its recent trading ranges but within the predicted EIA price range prior to the tensions in the Middle East. During the late summer, the EIA issued a forecast for crude oil to trade for the balance of the year (average) in the 94.00 price range. This became distorted after the Egyptian political turmoil followed by strikes in Libya and then chemical weapons in Syria. Crude oil has now returned to the forecast trading range and is expected to hold at this range for the balance of the year. Crude oil is trading at 93.10 this morning up a few cents as the US dollar eased. The official EIA government data might show crude stocks rising by under a million barrels for the week ended 9th November. US crude inventories are expected to rise to 386.2 million barrels according to a survey by Bloomberg. Product-related stocks, gasoline inventories are seen falling by 900,000 barrels whereas distillate supplies are seen dropping by nearly a million barrels. This week’s EIA inventory report usually due on Wednesday has been delayed by one day as Monday was a legal holiday in the US. Traders will have to wait until Thursday to get the official data.
The International Energy Agency said that America will surpass Russia and Saudi Arabia as the world’s top oil producer by 2015, and be close to energy self-sufficiency in the next two decades, amid booming output from shale formations. Crude prices will advance to $128 a barrel by 2035 with a 16 percent increase in consumption supporting the development of so-called tight oil in the U.S. and a tripling in output from Brazil, the IEA said today in its annual World Energy Outlook. The role of the Organization of Petroleum Exporting Countries will recover in the middle of the next decade as other nations struggle to repeat North America’s success with exploiting shale deposits, the agency predicted.
News yesterday showed that OPEC increased its global demand forecast by 34,000 barrels a day and projected that global demand for OPEC crude will decline by 300,000 barrels a day next year. OPEC appeared to backpedal from previous skepticism over the significance of the rise in oil production from shale, the Paris-based International Energy Agency dismissed speculation that unconventional resources could weaken OPEC’s role in supplying oil over the long term. Brent oil eased by 5 cents to trade at 105.77 after breaking above the 106 level.
Natural gas prices eased by 5 points after a strong rally on Tuesday pushed prices close to 3.70. Natural gas is trading at 3.636 this morning. Natural gas ended higher for a sixth straight session on Tuesday, as investors focused on the mostly colder shift in the temperature outlook for the next two weeks and shrugged off the brief warm-up expected later in the week. The United States is likely to export 10-15 billion cubic meters (bcm) of liquefied natural gas (LNG) per year to Europe from 2020, although it will ship much more to Asian markets, a report by Wood Mackenzie showed. Future demand for US NG continues to rise as the DOE slowly approves new projects and global demand for the cheap energy product increases. Traders can expect prices to remain higher for the day on account of expectations of colder weather in the eastern US next week.