Oil Prices Cool Down
With warmer weather, successful Iraqi elections, and OPEC’s decision not to cut output, oil prices went down.
“OPEC’s decision not to cut production quotas and the passing of Iraq’s election with no disruption to oil exports kept the market under pressure,” said analysts for the Sucden brokerage firm. “Temperatures in February and March are forecast above normal, easing demand for heating oil as the winter ends.”
The outcome of OPEC’s meeting seems to be the biggest factor.
“The oil market firmed mainly because the producer group put the world on notice that it thinks higher oil prices are here to stay,” said Energyintel’s Jane Collin.
“We had a big build last week, and if it keeps building, prices will drop,” said Informa Global Markets analyst, Peter Luxton. “OPEC are quite happy at current price levels; maybe below $40 they will start to get worried.”
Traders will certainly be watching the weather forecasts as well.
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