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Oil Price Fundamental Daily Forecast – Unexpected Demand from Fuel Switching Put $100 Crude on Radar

 

U.S. West Texas Intermediate and international-benchmark Brent crude rallied to multi-year highs on Friday on a rebound in demand amid tighter supply inventories.

The U.S. benchmark crossed the psychological $80 per barrel level on Friday for the first time since November 2014, jumping more than 2% before easing into the close. Brent also rose more than 2% higher early in the session.

On Friday, December WTI crude oil futures settled at $78.76, up $0.80 or +1.03% and December Brent crude oil finished at $82.39, up $0.44 or +0.53%.

After taking a mid-week dip on worries about rising U.S. energy and product supplies, the rally picked up steam alongside a broader rally in commodities including natural gas and coal amid an energy crunch that’s sweeping Europe and Asia.

Other factors contributed to the markets up and down and up performance throughout the week until Friday’s surge.

 

Gasoline Prices Rise as Traders Shrug Off Inventory Increase

 

Short-term Outlook

The big news last week and the story that could eventually send prices for WTI and Brent crude oil to $100 per barrel is that some industries have begun switching fuel from high priced gas to oil. This is the kind of demand that the experts did not factor into their pricing models.

 

Reference: Yahoo Finance, FXEmpire