January crude oil prices traded higher during the initial morning hours, helped by an improving macroeconomic backdrop and rising tensions in Iran and Syria. A better than expected read on German consumer sentiment and a well-received Spanish debt auction fueled an early pick-up in risk attitudes. Some traders viewed the latest 2012 global demand forecasts from the IEA as a positive, showing an increase of 1.3 million barrels per day. There were also mounting tensions brewing in Syria after the second bombing of a pipeline near Homs in the past week. Meanwhile, the focus in the crude oil market has begun to shift to tomorrow's OPEC meeting. OPEC lowered their 2012 global oil demand forecasts to grow at a slower 1.1 million barrel per day pace, largely in response to new proposals for austerity measures in developed countries and their potential impact on Chinese and Indian demand.
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