Low volume but record high crude price
Crude-oil future prices for sweet light crude for January delivery which had ended at $93.84/bbl last week (16 November) finished $4.34 (4.4%) higher this week (23 November) at $98.18/bbl. Price increased during the week after OPEC kept production levels unchanged and traders scrutinized every detail of the weekly inventory report released by the Energy Department.
In the currency market also, the dollar was lower across the board, hitting a new low against the euro and the same also spurred up crude price.
On Friday, 23 November, crude oil for December delivery rose $0.89 to end at $98.19 a barrel on the New York Mercantile Exchange. The session saw an intraday low of $96.55 and touched an intraday high of $98.45 earlier in electronic trading.
Prices rose on Monday, 19 November after Organization of Petroleum Exporting Countries (OPEC) left production unchanged at a weekend meeting in Riyadh. As per OPEC, the oil market was well-supplied and recent gains were due to speculation and beyond the group's control. OPEC is scheduled to discuss oil production for the first quarter of 2008 at a meeting in Abu Dhabi on 5 December.
As per the weekly inventory report by the Energy Department on Wednesday, 21 November, crude stockpiles dropped by 1.1 million barrels in the week ending 16 November as against an expected build-up. Crude oil for January delivery rose 55 cents to $98.60 a barrel after the report. But then price fell after traders realized that crude at Cushing, Oklahoma, the delivery point for crude traded on the Nymex, rose 1.2 million barrels to 14.6 million in the latest week.
OPEC has reduced its fourth-quarter estimate of global oil demand growth to 1.97%, down from 2.1%, citing warmer winter weather in the Northern Hemisphere and the higher price of gasoline. The cartel also trimmed this year's world oil demand growth to 1.4% from 1.5%, but the cartel kept the first quarter of next year unchanged at 1.8%.
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