Brent Crude Oil traded steadily below $112 on Wednesday morning as investors proceeded with caution ahead of several upcoming indicators of the global economy's health. The commodity was trading at $111.84.
The biggest driver of Brent prices has been the question of whether or not supply will outpace demand in 2013. Investors are eyeing the US, China and Europe for clues about the economy's condition in the coming months.
On Thursday, China will release its trade data, an important indicator of the energy consuming giant's economic health. Lackluster data from China early in 2012 suggested the nation was slowing down; but at the close of the year, economic data showed signs the economy was picking up. The trade data, coupled with fourth quarter growth information to be released on January 18th will be a major driver for Brent prices.
Also on Thursday, the European Central Bank and the Bank of England will hold their policy meetings. While the ECB meeting is expected to result in no change to the current interest rate, investors will be watching for clues about whether the bank is considering lowering the rate later in 2013.
According to CNBC, many analysts have an optimistic view of 2013 and expect global economic growth to swell this year, in turn increasing oil demand. Deutsche Bank reportedly expects Brent to average $115 per barrel in 2013. Weighing on Brent prices has been the US' crude oil production which is expected to increase in 2013 and rocket even higher over the next 2 years. The country's ‘fracking' technique allows oil producers to get shale oil from rock formations and has changed the energy market completely in the past five years.
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