Oil ends 2011 up 13 per cent, third year of gains
Sunday, 1 January 2012
Oil prices ended 2011 up 13 per cent as a fresh wave of supply concerns capped a year of unrest and disruptions in North Africa and the Middle East that overwhelmed concerns about the economic health of large consuming nations.
Iran's recent threats to shut the Strait of Hormuz, a vital oil shipping chokepoint, added another geopolitical threat to markets gripped throughout the year by the unrest of the Arab Spring, most notably shutting exports from OPEC-member Libya.
The supply problems helped lift the price of global benchmark Brent crude by 13.3 per cent on the year to average nearly $111 a barrel for 2011, eclipsing the previous annual record of nearly $100 struck in 2008 and marking the third year of annual gains.
"(The 2011 price gains) belied an extremely volatile pricing environment that saw (U.S.) values drop to as low as $75 in early October after advancing to around $115 in early May," Jim Ritterbusch, president at Ritterbusch & Associates said in a note.
U.S. crude prices rose 8.2 per cent from the close of 2010, outperforming most other commodities tracked in the 19 commodities tracked on the Thomson Reuters-Jefferies CRB index that fell on the year. The average price for the year was about $95 a barrel.
Market players said the factors that helped capped price gains in 2011 could continue into the new year. "While a (2012) test of the $75 level might appear out of reach in view of a variety of geopolitical uncertainties, we feel that global contagion off of a weakening euro zone will be providing significant bearish impetus," Ritterbusch added.
U.S. heating oil futures were the top performer on the index, gathering strength from rising U.S. exports and the impending closure of three of Petroplus' five European refineries after lenders froze its credit lines this week.
Heating oil gained over 15 per cent in 2011, while U.S. RBOB gasoline futures rose by more than 9 per cent.
Iran's recent threats to shut the Strait of Hormuz, a vital oil shipping chokepoint, added another geopolitical threat to markets gripped throughout the year by the unrest of the Arab Spring, most notably shutting exports from OPEC-member Libya.
The supply problems helped lift the price of global benchmark Brent crude by 13.3 per cent on the year to average nearly $111 a barrel for 2011, eclipsing the previous annual record of nearly $100 struck in 2008 and marking the third year of annual gains.
"(The 2011 price gains) belied an extremely volatile pricing environment that saw (U.S.) values drop to as low as $75 in early October after advancing to around $115 in early May," Jim Ritterbusch, president at Ritterbusch & Associates said in a note.
U.S. crude prices rose 8.2 per cent from the close of 2010, outperforming most other commodities tracked in the 19 commodities tracked on the Thomson Reuters-Jefferies CRB index that fell on the year. The average price for the year was about $95 a barrel.
Market players said the factors that helped capped price gains in 2011 could continue into the new year. "While a (2012) test of the $75 level might appear out of reach in view of a variety of geopolitical uncertainties, we feel that global contagion off of a weakening euro zone will be providing significant bearish impetus," Ritterbusch added.
U.S. heating oil futures were the top performer on the index, gathering strength from rising U.S. exports and the impending closure of three of Petroplus' five European refineries after lenders froze its credit lines this week.
Heating oil gained over 15 per cent in 2011, while U.S. RBOB gasoline futures rose by more than 9 per cent.