Crude oil prices changed directions again and fell yesterday, despite the ongoing rally of the US stock markets. The USD slightly depreciated against the Euro. This recent decline may just be a correction, as crude oil prices are currently traded up; WTI oil prices is still around the $85-$90 mark and Brent oil around the $110-$115.The EIA published its weekly report yesterday and oil stockpiles sharply fell by 7.7 million bbl. Today there are many reports and events on the agenda including: the Philly Fed Manufacturing Index, US unemployment claims, ECB President Trichet will hold a conference, Euro Area and US consumer price indexes reports and the EIA’s weekly natural gas report.Update: ECB announced it will provide US dollar based loans to European banks may have eased the concerns of traders regarding Euro debt and resulting in crude oil prices along with US stock markets rising.
Here’s a short analysis of the crude oil market for today, September 15th:
Crude oil prices –September
On Wednesday, September 14th crude oil price (WTI) declined by 1.44% to $88.91/b; Brent oil price also declined by 2.23% to $111.54/b; during September WTI spot oil rose by 0.11%; Brent oil fell by 4.24%.
The chart below shows the normalized prices (August 31st =100) of WTI spot oil and Brent oil during September.
Premium of Brent oil over WTI spot oil
The premium of Brent oil over WTI spot oil continues to decline from the high levels it was at the beginning of September. The premium reached on Wednesday $22.63. During September, this premium fell by 18.21%.
On Today’s Agenda:
Philly Fed Manufacturing Index: This report was likely one of the reports factors that affected traded to trade down the US stock markets and trade up gold and silver prices last month as the Philly Fed Manufacturing Index showed sharp drop in the index to -30.7 for August. The current expectations are a slight increase in the index;
Euro Area CPI: In July the annual inflation rate declined to 2.5%, a 0.2 percent point drop compared with June’s inflation; the expectations in the upcoming CPI report for August 2011 are a slight decline. This news might affect the Euro currency, ECB’s October rate decision and consequentially crude oil prices;
US CPI: This report will show the main changes in the CPI during August. In July 2011, the CPI inclined by 0.5% and over the last 12 months by 3.6%.
ECB conference Trichet speaks: following the recent rate decision in which ECB kept the rates unchanged at 1.5%, Trichet will give a speech regarding the economic stability of the Euro Area;
EIA Natural gas report: the EIA will publish its weekly report on the changes in the natural gas markets vis-à-vis the prices, production, demand, imports and supply. See here for the last natural gas report.
US Oil Stockpiles fell by 7.7 million bbl
The US Energy Information Administration published yesterday its weekly report on the U.S. petroleum market: according to the report, U.S. crude oil stockpiles fell by 7.7 million barrels. The oil production and imports also fell as it may be stemmed from the recent weather disruptions in the US.
S&P500 / crude oil prices – September update
The S&P500 index increased yesterday by 1.35%; in past three days the S&P500 index gained back 2.98% to its value; during September, the S&P500 index declined by 2.48%. There is a strong positive correlation between crude oil prices and S&P500 index. If the US stock markets will continue their, it may reflect in crude oil prices rising.
Current crude oil prices
Major crude oil prices are currently traded up in the European market:
The Nymex crude oil price, short term futures (October 2011 delivery) is traded at $89.39 / barrel, a $0.48/b increase or 0.54%, as of 11:53*.
The Dated Brent spot oil price inclines by $2.48/b to $114.02/ barrel as of 12:05*.
Thus, the current premium of Brent over WTI is at $24.63/b.
Crude oil price outlook and analysis:
Crude oil prices are likely to follow pending the outcome in the Philly Fed Manufacturing Index that may affect traders. In the near future, I still think WTI oil price will remain around $85-$90 mark and Brent oil around $110-$115, but during the remainder of September crude oil prices are likely to moderately decline.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
9:00 – ECB monthly bulletin
10:00 – Euro Area CPI and core monthly inflation (August)
13:30 – Department of Labor report – U.S. unemployment claims
13:30 – Report on US CPI
15.00 – Philly Fed Manufacturing Index
15:30 – EIA report about Natural gas storage
19:00 – ECB conference Trichet speaks
14:00 – US TIC long term purchases
For further reading:
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.