Crude oil prices continue to fluctuate very moderately, despite the ongoing turmoil in the Middle East; OPEC meeting is being held today, and EIA will publish its weekly crude oil report on oil stockpiles, consumption and production in the U.S. Let’s review and analyze the crude oil market for today, June 8th:
Crude oil prices – June 2011
Yesterday, June 7th, crude oil price (WTI) moderately inclined to $99.09 – a 0.08% increase; during June so far the WTI spot oil decreased by 3.52%.
Brent oil price also increased by 2.33%, and it reached $116.68; during June Brent oil declined by 0.43%.
As in the chart below, following the sharp falls of crude oil prices at the first few days of May, they have remained nearly unchanged during most of May and June up to date.
The premium of Brent oil over WTI started to puck up in recent weeks and rose by 21.48% in June as it reached on Tuesday, June 7th $17.59/b.
The chart below shows the changes of this premium during May and June 2011.
Today in Vienna Austria will be held an OPEC meeting that will revolve around whether or not OPEC will raise its reported oil production.
During 2011 crude oil prices inclined sharply; some of the reasons include the rise in global demand for crude oil ,and the decline of OPEC’s crude oil output in recent months due to the decline in Libyan oil production;
According to recent news from Bloomberg, OPEC officials didn’t reach an agreement on whether to raise raise oil production in 2011. If this will be the case, it’s expected that oil prices may decline.
Saudi Arabia is pushing to raise OPEC’s production; however Iran and Venezuela lead the charge not to raise OPEC’s oil production quota.
Petroleum stocks in the US
The US Energy Information Administration will publish today (instead of yesterday) its weekly report on U.S. petroleum stocks: Bloomberg estimates that U.S. oil stocks dropped by 1.05 million barrels during last week. In the previous report, U.S. Petroleum and oil stocks rose during last week by 7.2 million barrels or by 0.41% (See here the recent petroleum report).
The Chairman of the Federal Reserve gave a speech yesterday today on the U.S. economy’s economic outlook. He referred to the Fed’s monetary policy and the rising commodities prices in the world (see here for more on this subject).
It’s still not clear what will be the Fed’s next move once the stimulus plan will end this month, but at the current slow progress of the US economy in 2011, the Fed might consider an additional stimulus plan to jump start the US economy.
The U.S. EIA’s oil outlook to be published this week may correct downward its outlook on the global oil demand in 2011 and 2012; this report might affect the decision to raise the oil output in the upcoming OPEC meeting.
Current crude oil prices
Major crude oil prices are currently traded with moderate falls at the European markets:
The Nymex crude oil price, short term futures (July 2011 delivery) is traded at $98.45 / barrel, a $0.64/b drop or 0.65%, as of 13:18*.
The Dated Brent spot oil price declines by $0.84/b and it is at $115.84 / barrel as of 13:29*.
Thus, the current premium of Brent over WTI is at $17.39/b.
Crude Oil price outlook and analysis:
Crude oil prices continue to demonstrate moderate fluctuations as the financial markets are still seeking direction for crude oil prices.
Due to the slowdown in the US and parts in Europe this might help bring down current crude oil prices within several weeks, unless there will be a new event that will stir up the financial markets
In the mean time, I still speculate that in the short term crude oil prices will remain at their current high prices around $100 per barrel for WTI and $115 for Brent oil.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
15:30 – EIA report about Crude oil inventories
13:30 –Canadian Trade balance
13.30 – Report on American Trade balance
13.30 – ECB conference rate decision
13.30 – Department of Labor report – U.S. unemployment claims
15.30 – EIA report about Natural gas storage
For further reading:
- Weekly outlook for June 6 – 10
- Oil prices started June with little changes – Weekly recap 31 May- 3 June