Crude Realities: Oil Sees Biggest Drop in Six Weeks
Oil dropped 2% on what was a low-volume trading today. The warmer-than-expected winter is the reason for the decline. Energy analyst Mike Fitzpatrick of Fimat USA was on “Closing Bell,” and he says there are number of other factors at play as well.
With meteorologists predicting moderate weather in both the U.S. and Europe, Advantage Futures’ John Conolly, who also appeared on “Closing Bell,” agreed with Fitzpatrick that warm temperatures were “definitely softening the market.”
But Fitzpatrick also said that the U.N. sanctions against Iran, a major world oil producer, for its uranium enrichment program wouldn’t necessarily carry much weight. That showed in traders’ attitudes today, he said. Also, a lot of market participants don’t believe OPEC can engineer the cuts they’ve called for over the past few months.
Fitzpatrick is predicting an average oil price of $67 a barrel for 2007.