Crude oil prices started August with very sharp falls, the steepest declines since May 5th back when the US dollar strongly appreciated against the Euro. The recent drop in crude oil prices is related, in part, to the sharp falls in US Stock markets, the appreciation of US dollar and the concerns of US economy’s economic stability and credit rating; the US eventually lost its AAA credit rating over the weekend despite managing to raise the US debt ceiling earlier last week. By the end of the week, Brent oil price lost 5.68% of its value, and WTI spot oil declined by 8.53%, resulting in the spread between Brent oil and WTI oil reaching $22.88/b on Friday.
Let’s review the changes during last week (August 1st to August 5th) of crude oil prices (Brent oil and WTI), and present a summary of the recent EIA petroleum report:
Crude oil prices – highlights
WTI spot oil price declined during last week by 8.53%; its weekly average price fell by 7.14% as it reached $90.84 per barrel, compared with last week’s $97.83 per barrel. The average daily percent change of crude oil price (WTI) was -1.89%.
NYMEX Futures Price (September delivery) declined by 8.44% during the week, and reached $86.88/b on Friday, August 5th – the lowest price level since February 21st back when the turmoil in Libya just started.
Brent spot oil price also declined by 5.68% during the week, and the average price fell by 4.42% compared with previous week’s average.
The difference between the Brent and WTI spot prices moderately inclined during the week and averaged at $21.65; it finished the week at $22.88.
The high gap between Brent oil and WTI spot oil continues to suggest that the European oil market is still tighter than in the U.S. oil market.
Crude oil charts
The following chart shows last week’s trend of WTI spot oil price, NYMEX Futures Prices (September delivery) and Europe Brent spot oil price:
In the chart both Brent spot oil price and WTI spot oil had a downward trend during most of the week and a very sharp decline on Thursday.
The second chart presents the daily percent changes (i.e. changes around the trend) of crude oil price (WTI spot oil, WTI future, Brent spot oil):
As seen, WTI spot oil and Brent oil declined during most of the week except on Friday when both of these energy commodities prices inclined, probably due to the news of improved figures in the recent US labor report. On Thursday, there was a very sharp fall mainly to WTI spot oil price.
Petroleum Stocks –highlights:
For the week ending on July 29th according to the recent EIA report of the US oil market, the U.S. oil stocks changed directions and declined during last week by 1.94 million barrels and reached 1,807 million barrels.
The chart below shows the petroleum stocks levels compared to the WTI spot oil price during 2010 and 2011. It shows the stability of WTI spot oil price during the past few weeks; petroleum stocks keep on stocking up as part of a seasonality effect.
For further reading:
Previous issues of weekly report: