Current Crude Oil Futures Prices Flat in London Trading

Oil prices traded flat for the most part in London trading as supply risks and economic instability combine to offer an environment of stable pricing.

During early morning trading on the ICE Futures Exchange, the crude price per barrel of Brent for delivery in December shed 15 cents to $106.31.

On the NYMEX, the U.S. benchmark was trading lower by 21 cents for a crude price per barrel of $84.89.

In a note to its clients, Commerzbank said that the current oil prices are expected to enter a relatively stable period. Moreover, a drop from present levels is expected, excluding the possibility of supply risks from Nigeria, Azerbaijan and the North Sea. In addition, any recovery in prices is being stopped by the uncertainty of the threatening “fiscal cliff” in the United States, combined with relatively weaker demand.

The recently issued report from OPEC, which reflected the latest report of the IEA, highlighted the deteriorating demand outlook.

Higher prices of crude oil are quite possible for other reasons, including abundant liquidity and inventory risks, said Commerzbank.

In a note from VTB Capital, comparatively low demand and high supply will go on to restrict the oil markets for the foreseeable future.

On the supply end, concerns were raised with news that warplanes from Iran had fired on an unmanned drone of the United States over international seas.

With the Israeli air force shooting at Hezbollah drones, Iran shooting drones of the United States and Turkey searching for Patriot missiles to make a no-fly area around the border of Syria, events are treading a fine line, said Petromatrix. The report also noted that Saudi Arabian spare inventory capacity is limited if needed to cover any disruption in the region.

Elsewhere in the energy markets, the gasoil contract on the ICE market for delivery in November is $3 higher, at $923.50 per metric ton. Meanwhile, wholesale gasoline for delivery in December is 60 points up at 2.6133 cents per gallon on the NYMEX.

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.

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