Commodity Daily News

OPEC Commentary and Risk Aversion Support Oil above $110

The price of Crude Oil received support yesterday as the Secretary General for the Organization of Petroleum Exporting Countries' (OPEC) made remarks regarding the current supply of crude in the global market. The Secretary, Mr. Abdalla el-Badri, remarked that current supply levels are adequate and in line with OPEC forecasts and agreements.

Moreover, the Secretary cited how OPEC's production output is the same now as it was in December 2010 since no changes were deemed necessary in the organization's meetings over the past several months. The organization has only recently boosted shipments from alternative members to make up for the loss of Libya's production output. Overall output remained steady.

Oil prices reached beyond $110 a barrel yesterday following these statements, and following the turmoil in the global stock markets brought on by S&P's downgrade of its US long-term debt outlook. Market adjustments will likely drive many investors into physical assets over the next several days, helping to lift the price of commodities like oil and gold. Traders will want to keep an eye on such shifts in investment as risk aversion, ever present in today's market, will likely continue to support oil prices above $110.