FXEmpire | February 14 2013 1:35 EST
This morning light sweet crude oil prices are trading almost flat above $97. There is very little in the way of supporting eco data or news that would have an effect on petroleums. Traders can expect oil prices to come under pressure on concern of lower demand due to uncertainty of major oil consumer like the US and Japan. The dollar remains firm this morning in the Asian session, keeping the dollar denominated commodity on an even keel.
Fourth quarter GDP of Japan contracted to -0.40% though stimulus program of 101 trillion have provided little lift, after the newly elected Prime Minister assured markets earlier this week that Japan would emerge from its recession. Today the BoJ held rates and policy having no effect on markets. Therefore, concern of slowdown in Japans economy may continue to pressurize on oil price although that is tempered by huge stimulus and infrastructure projects which will require additional energy consumption.
The Department of Energy has reported that production reached a high level of 20 years, whereas slight improvement in distillates demand was witnessed in last week. Oil prices dropped as much as 0.9% after a U.S. government report showed crude output jumped to the highest in 20 years. Yesterdays EIA inventory showed a decrease in US supplies but was within line of expectations having little effect on the price. U.S. crude production rose to the highest since December 1992 and stockpiles increased, according to the Energy Information Administration crude inventories data yesterday.
U.S. crude production climbed to 7.06 million barrels a day last week, the EIA, the Energy Departments statistical arm, said in a report. Stockpiles rose 560,000 barrels, the report showed. They were forecast to increase BY 2.2 million, according to the median estimate in a Bloomberg News survey.
Iran, which is under a Western embargo on its oil exports, agreed on some points in talks with the International Atomic Energy Agency in Tehran, Reuters reported, citing the nations state-run Press TV.
During the European session, expected contraction in eurozone GDP for the fourth quarter may further have negative impact on prices on speculation of lower fuel demand in the countries. Also from the US weekly jobless claims are expected to increase which will act as a bearish driver for oil prices. Most importantly, oil market is eyeing on Iran talk with the Worlds major powers in current month. Speculation on ease of nuclear tension may continue to cap on prices. Market attention remains focused on the nuclear test conducted by North Korea and United Nations sanctions.
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Originally posted here