Crude Oil Futures Prices Fluctuates within $88

Crude oil futures prices moved up and down around the level of $88 per barrel in the latest electronic trading after facing a huge blow on worries of poor oil demand.

In the Globex, the crude oil futures price for delivery in November grew 0.2 percent, or 14 cents, to $88.28 per barrel during trading hours in Asia. The contract reached an intra-session high of $88.43 per barrel and quickly fell to $87.91.

These movements happened after an overnight fall of 4.1%, or $3.75, with investors selling crude in spite of positive figures of the U.S. economy and brushing aside a surprise decrease in supplies.

Tim Evans, an analyst at Citi Futures, described the fall in the current crude price as being caused by a wave of liquidity representing an implied acceptance of crude as a commodity that has its own fundamentals stronger than other so-called “monetary” assets.

The announcement of the U.S. Federal Reserve of the important QE3 program, as well as a range of demonstrations in the Middle East, provided a potential for the market to move upward. However, the inability to change that report into stronger gains was a bearish sign.

QE3, otherwise known as the third round of openly-disclosed quantitative easing, is the Fed’s most recent round of asset buying.

The irregular current crude price movement occurred despite the latest report of the Energy Information Administration of a 500,000-barrel inventory decline for the week that ended on the 28th of September instead of the expected 1.5 million-barrel increase.

In the broader commodities market, gasoline and heating oil futures for November delivery grew by 0.5% to end at $2.81 per gallon and by 0.2% to finish at $3.07 per gallon, respectively. The price of natural gas for delivery in November rose 0.3% to close at $3.40 per million BTU.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

Facebook Twitter LinkedIn Google+ YouTube