NewsCrude drops below $82.50 per barrel on warmer weather expectationsPreviousForecastAnalysisCrude contracts dropped in the Asian trading session today, due to expectations for improving weather conditions in the U.S and Europe as the week progresses, especially after freezing temperatures in the past period dominated the Northern Hemisphere regions in the first ten days of 2010.
Crude declined for the second consecutive day, with the growing expectations for warmer weather to prevail over the biggest consumer, the United States; reducing demand on heating fuel, where the cold weather already supported demand setting a 19% rise in December.
Meanwhile, the dollar's decline in yesterday's trading supported oil prices to record levels near $84 per barrel, the highest level in about 15 months, yet crude contracts for February delivery closed at $82.52 per barrel.
Crude oil jumped through last month's trading from $69 per barrel levels to record levels near $84, the highest since 2008, after the cold weather covered several regions on the globe, specifically the U.S which in its own role supports demand on crude.
In the meantime, future expectations are still intact for further appreciation for oil after global economic data showed signs of a close recovery for economies, which will be interpreted as support for oil prices. However, these expectations are not compatible with possible fluctuations due to unstable economic data overshadowing financial markets through the current period.
Heating contracts for February delivery dropped in NYMEX to $2.16 per gallon down by 1.7 cents; motor gasoline inventories also fell by 1.32 cents to record $2.13 per gallon; while natural gas contracts rose by 2.6 cents to close at $5.48 per 1000 cubic feet. In London, Brent contracts for February delivery drop by 64 cents to record $80.33.
Crude oil contracts for February delivery opened today at $82.17 per barrel, recording its highest at $82.17 and lowest at $81.60 per barrel to currently trade around $82.20 per barrel.