Whether the Oil Price increases or not?

The world oil price during last week has fluctuated around the level of 58$ per barrel. On 16^th October, light sweet U.S crude (WTI) was settled at 59.94$/barrel and on 20^th October it reduced to the lowest level of 56.82$/barrel since 29^th November 2005. Last week average price was 5.6%(equal to 3.45 $/barrel) lower than the price of 61.82 $/barrel of a year ago and was down by 3.24$/bbl(equal to 5.3%) compared to the same period last month.

There are many changes in oil price during last week as OPEC has decided to cut production by 1.2 million barrel per day and the decision will be enforced since 1^st November 2006 (before they planned to curb by 1 million barrel per day ) due to the continuous increase in U.S crude inventory last week. However, the market reaction is: the prices went up then felt down quickly by acknowledging that OPEC wouldn’t effectuate the cutting plan, the OPEC dominant role has declined and the non-OPEC producers has pushed up their output and impact on world oil market.

In Singapore market, the oil products prices also reduced. By meant of Platt’s, the week average price of Mogas 95R was 62.05/bbl; Mogas 92R was 61.37/bbl; Diesel was about 71.87$/bbl and gasoil’s in level of 286.85$/tonne.

The oil price is expected to be “hotter” in the coming time. According to Venezuela oil Minister, OPEC would continuously cut by 500.000 bbl/day in the next meeting in Abuja(Nigeria) on 14^th December. Meanwhile, the Northeast of US has suffered from the blizzard (especially in Buffalo, New York), if the temperature go down the demand of heating oil will go up so that it could push up the oil price.

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