Oil Price, OPEC Production Continue to Climb

Source:

"The price of crude continued climbing. . .despite reports production by OPEC rose in November to the highest output this year"

The price of crude continued climbing Dec. 1 in the New York market, up 1.5% despite reports production by OPEC rose in November to the highest output this year.

Reuter's reported the 11 OPEC members excluding Iraq produced 26.52 million b/d in November from a revised 26.43 million b/d in October, far above their quota target of 24.84 million b/d. Dow Jones Newswires put OPEC production at 26.65 million b/d in November.

Jakob said, "Trading yesterday showed some renewed strong intraday link to the dollar and equities, but West Texas Intermediate is still undervalued to its 2009 correlation. While WTI is still led by exogenous inputs, we are in a situation where the dollar needs to be pushed to lower and lower lows to maintain an equivalent level of support on oil, but that process increases the bubble implosion risk."

Meanwhile, the latest Purchasing Manager's Index posted by HSBC Group, one of the world's largest banking and financial services organizations, had a reading of 55.7, the highest since April 2004.

Analysts in the Houston office of Raymond James & Associates Inc. reported, "On the natural gas side, as a frigid winter appears to be the market's only hope for price support, prices dipped yesterday on conflicting weather forecasts."

However, Pritchard Capital Partners said, "One positive sign for the natural gas market is the recent improvement in hub prices. The major natural gas hubs are all now above $4/Mcf with the exception of the Agua Dulce hub in Texas. The higher hub prices are most likely a reflection of higher natural gas demand as we move into winter and withdrawal season. The natural gas picture seems fairly grim due to the current oversupplied situation in the market, but this close to withdrawal season it is unlikely natural gas will continue to slump."

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