After downward pressure the week beginning 2 January, crude oil prices have resumed their upward trend with European prices in particular coming close to breaching the $100 a barrel mark.

Brent crude prices were $98.30 a barrel, up $2.98 from 6 January when it was priced at $95.32 a barrel. This is the highest level since October 2008.

The 12-crude basket of exports from the member states of the oil producers group Opec averaged $92.13 a barrel for the week ending 14 January. This is up $1.15 a barrel on the previous week, which settled at $90.98 a barrel.

Although on the rise, US benchmark West Texas Intermediate (WTI) contracts have been slower compared with other benchmarks such as Brent crude. WTI prices rose to $91.910 a barrel at the end of 12 January, up $1.61 a barrel from 6 January when it was valued at $90.03 a barrel.

Prices have been supported in the US by the closure of the 800-mile-long trans-Alaskan pipeline, which transports 12 per cent of the country’s production following a leak. The operator, Alyeska has received government permission to restart the pipeline for interim operations, and normal flows are expected to resume later this week.

Crude oil inventories in the US totalled 333.1 million barrels on 7 January, according to a 12 January report by the Energy Information Administration (EIA). This is down 220,000 barrels from the previous week.

In its Short-Term Energy Outlook, released on 11 January, the EIA expects WTI prices to average $93 a barrel in 2011, $14 higher than the average price for 2010. It also forecasts prices to rise in 2012 with average prices at $99 a barrel on the back of tightening world oil markets.

World oil consumption is expected to grow on average 1.5 million barrels a day (b/d) until 2012 while supply from non-Opec countries averages less than 100,000 b/d each year. 

“Consequently, EIA expects the market will rely on both inventories and significant increases in production of crude oil and non-crude liquids in Opec member countries to meet world demand growth,” says the report.