WTI crude oil futures open Tuesday’s trading session back around $91 a barrel after several days of declines for both US and Brent oil prices may be close to an end as analysts predict that oil under this price level could have OPEC cutting oil output.
Latest WTI Oil Price
US Light crude oil futures for August 2011 delivery was trading at $90.77 a barrel, 05.30 GMT this morning in electronic trading on the NYMEX.
IEA and OPEC Differences
Last week’s IEA decision to open up oil reserves has drawn sharp criticism from major oil producers, who are concerned that it will lead to a decline in oil prices. At a press conference yesterday, Abdalla Salem El-Badri, secretary general of OPEC called the IEA’s decision unnecessary.
“If the market continues its drop below $89 a barrel, we’ll probably see a cut in production.” said Tony Rosado, broker at GA Global Markets in New York.
Meanwhile, IEA Executive Director Nobuo Tanaka said at an industry conference in Beijing over the weekend that the agency would continue to monitor energy markets and that it was ready to act again if needed to stabilise oil prices.
So just to get this correct, the IEA are attempting to bring oil prices lower, however several OPEC member countries are unhappy about oil prices under $90 a barrel. Right now we are at the $91 a barrel mark. Seems oil prices will not be falling much lower this this.
US Dollar and Oil Prices
The main factor which could drive oil prices lower in the short term would be strength in the US dollar in currency market trading.
The US Dollar Index, which tracks the US dollar against six major world currencies, was up 0.49% to trade at 76.46, after rising earlier to 76.58, the highest since 1st April.