Ransquawk Energy Markets Commentary - Nov. 26, 2007

Discussion in 'Commodity Futures' started by Ransquawk, Nov 26, 2007.

  1. Ransquawk

    Ransquawk ET Sponsor

    Energy futures are trading mostly higher this morning on a weaker dollar after the UAE said that it is reviewing its US dollar peg and forecasts of below normal temperatures across most of the country during the first week of December. Also supporting prices were comments by the chief economist of the IEA last Friday, who said that oil prices could explode if there is a war with Iran.

    In an interview published Friday in the German newspaper, “Die Welt”, the chief economist of the International Energy Agency, Birol, said that oil from the Middle East should cost at most $20 a barrel, although it would be a long-time before oil prices fell to around $50 a barrel. He added that “We can’t count on it happening in the short-term and if there is a war with Iran, prices could explode.” Birol also said that he does not believe that speculation is the main driver of increasing oil prices, as speculation only intensifies a situation that emerged in light of “scarcity and geopolitical risks.”

    A short while ago Lloyd’s Marine Intelligence Unit reported that OPEC oil exports, excluding Angola, fell 340K b/d in the first two weeks of Nov. versus the last two weeks of Oct. It is worth nothing that last week Oil Movements reported that OPEC exports were to rise 720K b/d in the four weeks to Dec.

    According to the CFTC’s Commitment of Traders report for the week ending Nov. 13, long futures positions in WTI crude futures fell by 26,712 contracts to 225,232 contracts, while short positions rose 51,500 contracts to 197,666 contracts. Total long futures and options positions fell 346,437 contracts to 2,405,814 contracts, while combined futures and options short positions fell 337,493 to 2,400,450 contracts.

    On the weather front, the National Weather Service said yesterday that temperatures in the U.S. will cool this week and fall below average across most of the country during the first week of December.

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