Overview of the oil market for 15.01.10

Dynamics
Quotes of the oil market on Friday, January 15 and results of the auctions closed with a decrease in price, showing the fall of the fifth day in a row, against a background of strengthening U.S. dollar on the currency market FOREX, and also because of the negative dynamics of equity markets and adjacent areas.

At the New York Stock Exchange NYMEH the February futures price of U.S. crude fell by 1.39, or 1.8%, and its price was 78.00 dollars per barrel.

The exchange ICE in London, Brent crude futures price fell 1.46, or 1.9%, to 77.11 dollars per barrel.

Causes
On Friday, Jan. 15 quotes on the market of "black gold" closed with a decrease in price under the following factors: 1 - strengthening of the dollar in the FOREX market after the release of economic news makrostatistiki and 2 - the fall of the stock sites, where the negative dynamics of U.S. stock prices led to the highest in the past month drop the index S P500 (Dow Jones industrial average - 10609.65 (-100.90, or -0.94%), Nasdaq Composite - 2287.99 (-28.75, or -1.24%), SP 500 - 1136.03 (-- 12.43, or -1.08%)), 3 - negative dynamics of the neighboring markets, namely the fall in prices of precious metals; 4 - economic news, as presented on Friday a monthly report the International Energy Agency noted that the outlook for the oil refining industry in the 1 st quarter look not too rosy, given that oil reserves are in countries of the Organization for Economic Cooperation and Development, remain high and the trend in world demand for energy continues to "look weak".

From news worth noting that oil production in the world in December 2009. increased compared with the previous month, approximately 270 thousand barrels per day and was about 86.2 million barrels per day. Such data issued on Friday, January 15, the International Energy Agency (IEA). Including oil production in 12 countries of OPEC in December increased by 75 thousand barrels per day, up to 29.1 million barrels per day. Experts estimate that the IEA, oil production by OPEC in 2010. to average 29.1 million barrels per day. For countries outside the OPEC average for 2009. the level of oil experts from the IEA estimated at 51.3 million barrels per day. However, in 2010. volume of oil production outside OPEC countries may increase to 51.5 million barrels per day, experts predict the IEA. It is expected that in 2010. substantially increase oil production in Brazil, Australia, Colombia, India, as well as in CIS countries. It is expected that in 2010. consumption of oil, the world economy as compared to 2009. by 1,7% or 1,4 million barrels per day. However, experts from the IEA warned that the growth of oil consumption in 2010. affect mainly the developing countries of Asia, whereas in OECD countries, reducing demand for oil and energy derivatives may continue.

What to expect?
Many analysts point to the fact that oil prices are still within the trading range of 75-85 dollars per barrel. This indicates that oil prices may have the potential for further growth. The close relationship between oil pricescb7and U.S. dollar is expected to continue to set the tone for trading on the oil market.

Why worry?
The main negative factors in the oil market are U.S. dollar and the technical picture, namely, the psychological and technical level of 85 dollars per barrel, which does not allow to pass higher oil prices, thereby encouraging market participants to lock in profits on the open long positions.

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