Organization of the Petroleum Exporting Countries has decided to maintain its production policy despite acute winters in the Northern Hemisphere. Demand for heating oil has surged, and oil prices have spiked past US$90 this month as colder than normal temperatures have swept across Europe, USA and parts of East Asia. Demand is expected to rise as Europe is expected to remain very cold.
The International Energy Agency has raised its 2011 oil demand growth forecast, and have indicated that fundamentals are strong, with oil stocks beginning to fall from historically high levels. However, concerns abound about the strength in commodities from China, as the government tightens money supply and could raise interest rates.