What’s Behind the Crude Oil Spike to $112 and Why There’s More to Come
Kent Moors, Ph.D
Apr 22, 2011
Crude oil prices rose for the third straight day yesterday (Thursday) – with more of the same to come.
West Texas Intermediate (WTI) crude for June delivery rose to $111.50 a barrel on the New York Mercantile Exchange, and traded as high as $112.48, the highest intraday price since April 11. Crude prices are up by a full third so far this year.
Brent crude is trading at $123.70 a barrel on the ICE Futures Europe exchange in London.
The latest surge in oil prices is not a result of new geopolitical developments – although they continue to weigh on the market.
Nor is it a result of any short-term inventory problems in either the United States or Western Europe. In fact, available supply of both crude oil and finished products continues to run considerably above five-year averages. American stockpiles are now at multi-year highs.
This spike is our introduction to a very quickly changing oil sector – one in which demand is coming from new quarters, and concerns are increasing over sufficient balance among regions.
The New “Oil Dynamic”