Despite the partial profit taking in long positions last Friday, which caused minor decline in price of oil futures (oil futures of Brent at ICE Futures Europe fell by 0.5% to 47.83), oil prices went up last week.
The rise in oil prices was caused by poor US labor market data, released at the beginning of this month and fires in the Canadian province of Alberta. Allegedly, some Canadian companies have reduced oil production in this region by 1.6 million barrels per day, which is over 1% of the world’s total supply.
Last week the price of crude oil Brent rose by 5.4%. Last Thursday the price reached new 6-month highs.
According to the recent forecast issued by the US Department of Energy, by 2014 oil prices can increase up to 141 USD or even up to 252 USD a barrel.
According to International Energy Agency (IEA), supply of oil has decreased, while demand on oil has increased. This fact also boosted the rise in oil prices last week.
According to IEA forecast in the next 6 month of this year oil reserves in the world will reduce by 200 000 barrels against the rise of 1.3 million barrels per day in the first 6 month of this year. Demand for oil will go up by 1.2 million barrels per day by the end of this year.
Reserves of oil and oil products in the USA fell by 3.41 million barrels past week against the forecast of the rise by 714 000 barrels. This fact added momentum to the rise in oil prices.
On Monday the price of crude oil Brent continued to rise at the opening of the Asian session.
Economic calendar is uneventful today. On Wednesday at (16:30 GMT+2) US Department of Energy will issue oil inventories report. If the inventories decline, oil prices will continue to grow. The rise in oil prices will low chances of reaching agreement of reduction of oil production between oil producing countries.
Given fundamental and news background oil prices the rise in oil prices will continue.