FX:Crude Futures Down as Investors Continue to Eye Demand Pointers Read more: http://www.foxbusiness.com/news/2012/12/17/crude-futures-down-as-investors-continue-to-eye-demand-pointers/#ixzz2FJKimkB9
At 1125 GMT, the front-month February Brent contract on London's ICE futures exchange is down 23 cents at $107.95 a barrel.
The front-month January light, sweet crude contract on the New York Mercantile Exchange is trading 12 cents lower at $86.61 a barrel.
"The start of the week promises to be very quiet, with some attention paid to December NY Fed Manufacturing index later today," wrote Andrey Kryuchenkov, an analyst at VTB Capital, in a note.
Oil has been trading within a tight range for several weeks, and few are predicting any change to that before the beginning of next year.
On the demand side, the U.S. is still struggling to come to an agreement on the fiscal cliff, which will see tax cuts and the end of some subsidies jointly strike at the beginning of January.
The election of a government in Japan means that there are now three central banks -- in the U.S., Europe and Japan -- "committed to do whatever it takes to stimulate growth in their respective economies," PVM analysts said in a note to clients, with the potential for a resultant boost for oil demand.
Oversupply is a concern for those worried about a possible fall in prices.
At a meeting last week the Organization for Petroleum Exporting Countries rolled over its 30 million barrels a day official quota "but with no conviction and there is a serious disagreement between Saudi Arabia and Iraq as to who will have to cut production back next year should market conditions warrant," wrote analyst Tamas Varga of PVM, in a note.
Varga said: "OPEC enters 2013 with plenty of reasons to be concerned."
Prices may, however, be supported by declining production in regions such as the North Sea, where benchmark Brent crude oil is produced.
"We regard the sharply shrinking rates from older oil fields as an important crutch for the oil prices," wrote analysts from Commerzbank, going on to explain that while Brent's importance in financial markets is increasing, some of the region's biggest producers are hitting difficulties.
"Norway has now officially admitted that it failed to reach its production target in November for the third consecutive month," Commerzbank said. Norway's November production totaled 1.44 million barrels a day, some 15% below its target and way below the 2000 peak of 3.12 million barrels a day.
Not all Norwegian data supports that story, however. Dow Jones Newswires reported Thursday that Norwegian oil and gas major Statoil ASA (STO) has said that 30 million extra barrels of oil could be produced from its Snorre and Grane fields as a result of improved seismic technology.
The ICE's gasoil contract for January delivery is up $0.50 at $923.25 a metric ton, while Nymex gasoline for January delivery is up 10 points at 2.6631 cents a gallon.
