Oil prices stayed unsettled in the second week of December with no clear trend emerging. The main pressure on prices was downward as crude oil supplies continued at a strong rate and demand was depressed by a persistence of mild weather in the northern hemisphere.
Price trends over the coming weeks now appear firmly locked in to weather patterns. Oil companies have built up stocks of heating oil and are waiting for harsh winter conditions to develop. A cold snap in the New York area in early December was credited with reviving prices that had been drifting for several days. Demand for heating oil will be the main influence on short-term price movements, analysts say.
In spite of the pressure on prices, the average spot price of the OPEC basket rose by $0.55 a barrel in November, according to OPEC figures. The average price for the month was $16.68 a barrel, compared with $16.13 a barrel in October. The average for the year to date for the OPEC basket is $15.50 a barrel, compared with a 1993 average of $16.33 a barrel. The average for Brent to the end of November was $15.80 a barrel; WTI was $17.20 a barrel.
Iraq is boosting its diplomatic efforts to resume oil exports, relying on closer co-ordination with Russia to press its case. At a press conference in Baghdad on 2 December Deputy Prime Minister Tariq Aziz said that Iraq would ask the UN Security Council in mid-January to suspend the sanctions on oil sales pending their formal review in the spring.