Brent crude rose in Asian trading on increased fears that Iran will disrupt oil supplies in the Strait of Hormuz, contributing to a risk premium of $4-$5 per barrel according to some market commentators. Further moves in the oil price are likely to be driven by noise out of Brussels and Washington surrounding the extent of any sanctions imposed against Iran. Watch out for the EIA’s release of US crude inventories today at 3.30pm GMT. A survey by Bloomberg suggests crude inventories are likely to show a 1 million barrel increase.
Little market news driving Asian crude prices this morning; Brent WTI spread near record high of $20.
The Baltic Dry Index continued to decline yesterday and is down almost 14% over the past year on lower demand for grains and ore from China.
(All times GMT):
Wednesday 11th January
15:30 – EIA Crude Oil Market Report: the EIA (Energy Information Administration) will publish its weekly report on the U.S oil and petroleum market for the week ending on January 6th. The Latest report will be available here.
Thursday 12th January
TBC – Chinese CPI y-o-y: Inflation declined from 6.5% in August to 4.2% in December, 0.9% lower than December 2010. Further declines may be supportive of commodity prices should the Chinese government be able to relax monetary policy. CPI is forecast at 4%.
Crude prices fell early in Asian trading as concern over Iranian threats in the Gulf faded and attention focussed on the deteriorating prospects for the European economy.