The market of energy didn’t create much news items today as the daily crude oil prices didn’t change much. Here are, however, the main scoops of the day:
China raised its price of retail gasoline according to Bloomberg as part of the China’s government plan to downsize its roaring rise of its economy. By doing so, China wishes to meet its energy targets which were set to be a reduction of 20 percent of its energy consumption per a unit of gross domestic product in a five year plan which ends in 2010. Seems that this target is not reaching its goal, a further elaborate report about China I will present latter on this week.
Today, October 26th, there haven’t been many fluctuations in the of daily crude oil prices:
The crude oil price of futures for December 2010 is, as of 17.48PM GMT, 82.42 USD per barrel on the New York Mercantile Exchange (Nymex), which represents a 0.1 dollar decrease and a 0.12% drop compare to the previous day.
The ICE Brent crude oil futures for December 2010 reached 83.45 USD per barrel – a 0.1 percent decrease as of 16.00 PM GMT.
The USD continues to drop against the EURO as its futures are being traded at roughly 1.3969 to 1.3939 and settled at 1.3846 (at 16PM GMT) which represent a decrease of roughly 0.85% or 0.02 dollar drop.
Currently, the level of production of crude oil in the US is estimated at roughly 5,500 thousands of barrels per day, during the month of October as of the third week of October.
An updated estimate of the EIA is to be published tomorrow, Wednesday October 27th for the preceding week’s production of crude oil in the US, which will reveal if there were any significant changes that could affect the crude oil price in the US.
It is a well known belief that the crude oil price is correlated to the exchange rate of USD/EURO. When comparing the two series in the past year it seems that there is a correlation between them, but also compare to USD/YEN rate. This is mostly true when comparing these series over an annual term and above. Nonetheless, when comparing the price of fuel in the short run (e.g. on a daily basis throughout a month) the correlation breaks up as expected. The reason for this is simple: there is more noise in the system of prices on a daily basis then on a monthly or annual basis. I will dedicate a post on this issue in the near future, but for now suffice it to say that although the USD has weakened compare to the EURO, it didn’t make much of a dent in the crude oil price which roughly didn’t change much today.