Crude Oil Commentary

Light crude oil for January delivery on the NYMEX settled and expired up $3.34 at $97.22/bbl. February 2012 now becomes the near month. Below are the progressive prices for January 2012 on the NYMEX.

Oil futures prices jumped in early trading Tuesday along with equity markets after the latest report on U.S. housing starts showed home building surging well past expectations, in a positive sign for the U.S. economic recovery. The Commerce Department said housing starts increased 9.3% to a seasonally adjusted annual rate of 685,000, the highest level in 19 months. Economists expected a rise of 0.3%. Stocks rose as the market opened, with the Dow Jones Industrial Average rocketing 149 points in the first minute of trading.

The market was also watching news of unrest in an oil-producing province of Kazakhstan and a meeting of world leaders in Rome to consider sanctions on Iran’s oil exports. In Kazakhstan, the government declared a state of emergency in the Caspian oil town of Zhanaozen after clashes between laid-off oil workers and security forces during an anti-government protest. Kazakhstan exported 1.5 million barrels of oil a day in 2010.

In Rome, leaders of 11 nations including the U.S. and Saudi Arabia are meeting to discuss sanctions of Iranian oil exports. Iran is the second-largest exporter of crude in the Organization of Petroleum Exporting Countries, supplying 2.5 million barrels per day to the world.

About JWM Energy Consultant
Professional Energy Consultant. I advise large energy-users on procurement strategies to reduce electricity and natural gas costs.

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