Crude oil prices start the second week of July with falls, the same way they have ended last week. Today, the Canadian Housing starts and business outlook survey reports will be published; the Bank of Japan will publish its monetary policy statement and rate decision which is likely to remain unchanged.
Here’s a short analysis and outlook of the crude oil market for today, July 11th:
Crude oil prices – July 2011
On Friday, July 8th crude oil price (WTI) sharply fell by 2.5% to $96.20/b; during July WTI spot oil added nearly 0.94% to its value.
Brent oil price, also continued to fell that day by only 0.53% to $117.78/b; during July Brent oil rose by 5.43%.
Premium of Brent oil over WTI spot oil
The premium of Brent oil over WTI spot oil rose again as it reached on Friday July 8th $21.58/b – the widest gap since June 13th; this gap rose by 31.51% during July, mainly because Brent oil price rose by a higher rate than WTI spot oil price did.
This recent upward trend of this Brent oil to WTI premium might suggest that the European oil market is tighter than the American oil market.
US Dollar / Crude oil prices – July update
The US dollar appreciated during July against the Euro, but depreciated against the Canadian dollar. During June, the EURO/USD and USD/CAD exchange rates were highly correlated with the daily percent changes of crude oil prices. This might suggest that the effect of the EURO/USD has on the decline of crude oil prices is strong.
Today, the Canadian housing starts report will be published, if it will continue to be positive, it may further strengthen the Canadian dollar against the US dollar and might curb the rises of crude oil prices.
Following last week’s publication of US labor report, in which only 18,000 jobs were added, it seems to be positively correlated (i.e. “bad news” usually pull crude oil prices down), even though that historically there wasn’t a significant relation between the US labor report news and crude oil price sensitivity.
Current crude oil prices
Major crude oil prices are currently traded down in the US markets:
The Nymex crude oil price, short term futures (August 2011 delivery) is traded at $94.73 / barrel, a $1.47/b decrease or 1.53%, as of 14:46*.
The Dated Brent spot oil price declines by $1.27/b to $116.51 / barrel as of 14:57*.
Thus, the current premium of Brent over WTI is at $21.78/b.
Crude oil price outlook and analysis:
Currently crude oil prices are traded down, probably due to the disappointing US labor report and the concerns related to the stability of Europe. If the economic indictors regarding US economy will continue to show a slowdown, it may further influence oil traded to trade crude oil down throughout the day.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
13:15 – Canadian Housing Starts
15:30 – Business outlook survey – Canada
Tentative – Bank of Japan – rate decision and monetary policy statement
Tentative –OPEC monthly report
13.30 –Canadian Trade balance
13.30 – Report on American Trade balance
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