Crude Oil Settles Sharply Higher as Iranian Protests Escalate

Group 1: Oil and Gas Prices - Crude oil and gasoline prices reached one-month highs, with February WTI crude oil closing up by $1.36 (+2.35%) and February RBOB gasoline up by $0.0203 (+1.15%) [1][2] - Rising tensions in Iran, the fourth-largest OPEC producer, are supporting crude prices as protests escalate against the government [2][3] - The dollar index rallied to a four-week high, causing crude prices to retreat from their peak levels on Friday [2] Group 2: Economic Indicators - The US economic outlook is optimistic, with the December unemployment rate falling by 0.1% to 4.4%, indicating a stronger labor market than the expected 4.5% [4] - The University of Michigan's January consumer sentiment index increased by 1.1 to 54.0, surpassing expectations of 53.5 [4] Group 3: Market Dynamics - The upcoming annual rebalancing of commodity indexes is expected to lead to buying of oil contracts, with Citigroup projecting inflows of $2.2 billion in futures contracts over the next week [5] - Concerns about energy demand are present, as Saudi Arabia cut the price of its Arab Light crude for February delivery for the third consecutive month [5] Group 4: Price Forecasts - Morgan Stanley predicts that the global oil market surplus will expand further and peak mid-year, leading to downward pressure on prices [6] - The crude price forecast for Q1 has been cut to $57.50 per barrel from $60 per barrel, and for Q2 to $55 per barrel from $60 per barrel [6] - Vortexa reported a 3.4% week-over-week decrease in crude oil stored on tankers that have been stationary for at least seven days, totaling 119.35 million barrels [6]