Crude oil prices are likely to end the week slightly recovering from the sharp falls they have endured last week. Crude oil prices along with the US stock market rose during most of the week. Currently, crude oil prices are traded down. Today, the Euro Area Inflation report will be published, and Canada GDP report.
Here’s a short analysis of the crude oil market for today, September 30th:
Crude Oil Prices –September
On Thursday, September 29th crude oil price (WTI) slightly increased by 1.15% to $82.14/b; Brent oil price also inclined by 1.18% to $106.44/b; during September WTI spot oil fell by 7.51%; Brent oil price decreased by 8.62%.
The chart below shows the prices development of WTI spot oil and Brent oil in the past three months – July up to September.
Premium of Brent over WTI – September Update
The premium of Brent oil over WTI spot oil slightly inclined on Thursday to $24.30. During September, this premium declined by 12.18%.
On Today’s Agenda:
Euro Area Annual Inflation: the inflation in Euro Area remained unchanged in August with an annual inflation rate of 2.5%; if the upcoming flash estimate won’t show an increase in the inflation rate, it may affect the EURO/USD and consequently affect crude oil prices;
Canada GDP: This report will present the changes in major industrial sectors for July 2011. In the previous report regarding June 2011, the real gross domestic product slightly inclined by 0.2%,. The news of this report could affect the USD/CAD exchange rate and consequently affect crude oil prices.
U.S. Oil Stockpiles Rose by 1.1 Million Bbl
According to the recent EIA report, U.S. Petroleum and crude oil stockpiles bounced back last week by 1.1 million barrels to 1,775.1 million barrels; this shift came after an eight consecutive week rise in U.S. Petroleum and crude oil stockpiles.
The chart below shows the petroleum and oil stockpiles levels compared to the WTI crude oil price during 2011.
Forex Market and Crude Oil Prices – September Update
The Euro to US dollar exchange rate slightly inclined on Thursday by 0.41%; during September the Euro/USD completed a 5.37% decrease. The USD also depreciated yesterday against the AUD, which is historically strongly related to daily percent changes in crude oil prices. If US dollar will continue to depreciate against the Euro and AUD, they may help crude oil prices to increase.
U.S. Stock Market / Crude Oil Prices – September Update
The S&P500 index inclined on Thursday by 0.81%. During September, the S&P500 index decreased by 4.80%. During September, there was a strong positive correlation between crude oil prices and S&P500 index (e.g. for WTI it was 0.638 and for Brent oil it was 0.519). If the US stock markets will continue to rise as they did in the past few days, they may further affect crude oil prices to incline.
Current Crude Oil Prices
Major crude oil prices are currently traded slightly down in the European market:
The Nymex crude oil price, short term futures (October 2011 delivery) is traded at $81.36/ barrel, a $0.78/b decrease or 0.95%, as of 12:44*.
The Dated Brent spot oil price declines by $1.27/b to $105.17/ barrel as of 12:55*.
(* GMT)
Thus, the current premium of Brent over WTI is at $23.81/b.
Crude Oil Prices Outlook and Analysis:
Crude oil prices regained back some of the losses they had endured during last week. Crude oil prices‘ slow recovery coincided with the US stock markets comeback. The cautious optimism regarding European policymakers approving the new bailout plan may keep fueling the market gains during the day; the decrease in the USD against major currencies also helps crude oil prices recover. I speculate that WTI oil price will remain around $80-$85 and Brent oil price around $105-$110 to end September.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
Today
10.00 – Euro Area Annual Inflation (September)
13:30 – Canada GDP by Industry
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Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.