The New Year is bringing clarity to the oil market and maybe to the stock and gold market as well. Oil prices got hit hard as weak data out of China and the reality of abundant supply stated to weigh on market sentiment.
Should $100 oil be forgot and never brought to mind? Oil made one last attempt to go above $100 a barrel but backed off as we end the year. It was a year that saw a surge in U.S. oil production and record natural gas production.
Brent crude prices, the benchmark for half the world’s oil, will weaken for a second year in 2014 as U.S. output expands and threats to Middle East and North African supply ease, the most-accurate forecasters said.
T'was the last Energy Report before Christmas, and all through the pits, the rise in the oil market was giving traders a fit. Traders put on their positions with care, because with all of the fracking the supply would be there.
Since the start of November, a confluence of cold temperatures, production setbacks, and infrastructure maintenance, has conspired to push natural gas prices to the highest level since last April for a front-month contract.
As we come to the end of 2013, it’s a good time to reflect on some of the biggest resources stories of the year. One that immediately comes to mind is the U.S. energy resurgence and its tremendous effect on oil and gas.
Shale production continues to rock the global oil market and is making our target of $88 a barrel looking more likely any day. Since crossing $100 a barrel, which I equated to crossing the Rubicon, oil had has its biggest monthly drop of the year.
We said the break was coming in oil and it came with an accentuation point from the EIA. Surging supply and the lessening of the Fed’s influence on the market should force a test to the lower end of the old support near $88.