Oil prices today hovered below $92 a barrel on Thursday 13th Jan after recent data and sentiment of an improving outlook for the US economy. With initial signs of growth and demand from the US, coupled with rising interest from financial investors, the oil price was pushed to a two-year high.
Crude gained 75 cents to settle at $US91.86 on Wednesday, the highest settlement price since 2008. The euro also got a boost after successful bond auctions in Portugal and Italy helped calm nervous investors over the fate of the euro-zone.
In London, Brent crude fell 27 cents to $US97.30 a barrel on the ICE Futures Exchange.  

Recently, oil prices have fallen below $70 for the first time in several weeks. There is warning looming large that Hungary’s economy resumed concern about the surge in energy demand in Europe along with its debt crisis. Toby Hassall, the chief commodities analyst at CWA Global markets Pty Ltd. was quoted saying “There are lingering concerns about the European fiscal problems and also of course the weak US jobs numbers on Friday also added to the gloom”.

The influence of the strengthening US dollar is not helping the oil prices today either. A stronger dollar only means that the European consumers have to pay much higher for the oil. Same is the case with buyers in Asia. The US dollar index has risen 0.3 % against other currencies.

Greek debt crisis has already made the headlines and Hungary is all set to follow, feel economists. It has announced cutbacks on Government spending. Eastern European nations are all muddled in similar kind of issues and the plummeting economy of Hungary and Greece has come as major warning signals of their financial frailties.

The US jobs market has been quoted as another significant reason for the issues governing oil prices today. Investors’ hopes were dashed as the jobs data showed a rise in nonfarm payrolls by around 431,000 jobs, based on temporary hiring. The real strength of the labor market is private employment. That rose only to about 41000 jobs disappointing most analysts.

Oil prices and stocks are likely to be low over the few weeks during the recovery of the European market and considering the fact that the job situation in US continues to be grim. The Atlantic hurricane prediction may also affect the US market and subsequently the oil prices today. This could be the most intense impact since the year 2005 and may provide support to the energy prices. The demand for oil however has been improving in countries like Japan and the US.

Stock market has always been studied by oil traders to gauge the investor sentiment. Most Asian and European markets plummeted since Friday last week starting with a drop of about 3.2 5 in Dow Jones index. Oil prices are expected to revive later this year but they are currently seen as “risky” investments that investors are reluctant to hold onto.

In other news on oil prices today from NYMEX heating oil fell to $1.94 a gallon dropping 1.32 cents and gasoline fell to 1.98 a gallon dropping by 1.33 cents. Natural gas lost 3.5 cents and is at $4.76 per 1000 cubic feet. Brent crude was also down to $71. 38 a barrel on the ICE futures exchange.

Oil prices today do not form a symmetric pattern as the trend is mixed. Optimistic analysts still feel that investors maybe over reacting to the situation as there is no such impending crisis. It is true that US economy is still struggling with respect to jobs but there is definitely no need to panic, they say.