Saudi Gazette
A New Year has begun – and how different this promises to be!
Global energy kaleidoscope has in the meantime undergone complete
metamorphosis. Its dynamics have changed drastically, impacting the
market psyche, so important and the determining factor in crude markets.
2012 was a different world, a different era, in some senses. Both Brent
and US West Texas Intermediate (WTI) crude oil were above $100 per
barrel then, reaching a peak in early March of just over $125 per barrel
for Brent and almost $110 per barrel for WTI. Positive economic news
leading to stronger oil demand and worries about supply disruptions
linked to Iran’s nuclear program contributed to firmer prices. Demand
from emerging markets was still strong, and numerous supply-side risks,
on account of geopolitical issues, were contributing significantly to
firmer markets.
Brent prices had already gained by about 16 percent in 2011, with New
York Mercantile Exchange gasoline prices up about 15.7 percent. Nymex
West Texas Intermediate crude oil rose 7.8 percent in the year. SEB
Commodity Research, part of the Swedish bank SEB Merchant Banking, at
the beginning of 2012 had said crude oil prices should remain at
elevated levels during the year, with Brent prices projected to be
around $114 a barrel.
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