Another all time record high for crude at $126.98 per barrel on fears that Iran's government may consider slashing oil production. Investors started entering crude oil markets again as they saw potential in profits. With the investment inflow overnight in the markets due to investors reacting to the news of Iran, caused the surge we saw today.
In addition to worries of Iran slowing production, there are also concerns regarding the US that they may have insufficient supply of distillate fuels which include diesel and heating oil. The contract gained $1.57 as it closed at $125.80 while recording a low of $123.10 per barrel.
Today crude oil prices steadied as it is projected that there is slow energy demand growth as the International Energy Agency cut its global crude oil demand in the US and Europe. They are projecting that demand would fall by 0.3% to 1.2% due to the rallying of crude oil prices so far. Also the Iranian oil Minister said that the decision of cutting crude oil production has not yet been made. The markets today opened at $125.97 while recording a high of $126.04 per barrel and a low of $125.65 per barrel.
Supply and demand factors continue to control the market as they resume pushing prices up while adding to inflationary pressures. Although this is not one of our normal cases as we are used to investors becoming attracted to the crude oil market as a hedge against inflation and a falling dollar, this time they are entering despite the rising greenback.
The EIA report is scheduled to come out today showing that crude oil stocks rose by 1.8 million barrels, which will be the fourth incline in a row. As for distillate stocks which include diesel and heating oil is projected to incline by 800,000 barrels. Gasoline stocks are predicted to be unchanged from last week.