Oil and gas prices outlook– 9 February

Let’s examine the energy markets and the related news that might affect major commodities’ prices such as crude oil price for today, February 9th:

Bloomberg reports a rise in WTI crude oil price today, as they announce of a decline in petroleum inventories in the US for the first time in the last five weeks. The EIA will issue its full report on this subject later on today (for more on last week’s Oil report in the US, see here).

Oil and Gas prices Outlook:

Crude oil prices (WTI) showed weakness during the month of February as the WTI spot prices declined by 2.9%; on the other has Brent spot declined by only 0.3%, and showed much more strength yesterday as it rose by nearly 1%.

The Egyptian affect on oil prices:

Currently the recent news is that there was a huge demonstration in Tahrir square, Cairo, where hundreds of thousands of people called for the immediate resignation of President Mubarak, for more on the Egyptian turmoil and its effect on crude oil price, see here.

Despite the ongoing rise in the Egyptian turmoil it seems that the WTI continues to fall, after it had inclined at the end of January, when the news from Egypt broke.  Brent seem to still push high and hike as it currently is traded above the 100$/b mark.

It’s worth keeping close tabs on the news from the Middle East as it could continue play a role in the behavior of crude oil price, mainly Brent spot.

As the week will progress, crude oil price will probably continue to fall unless there will be another breaking news from the Middle East to cause oil price to hike.

Natural gas prices outlook:

After the Henry Hub spot and future prices (natural gas) continue to fall as the winter season subsides we will probably continue to see this trend as the week will progress.

Also note that the spread between the future and spot prices continues to be high, i.e. Henry Hub spot is higher than future prices, which is known as backwardation; this might suggest that the market estimates the natural gas price in March to be lower than it is now in February.

Nonetheless, since there is snowfall in many parts in the US we could see some one day rises as there demand for natural gas peaks.

This could explain the recent price hike in New York City gate natural gas as it rose in the last couple of days, each day by over 30%.

On the news today:

7.30AM:  Wednesday 9th of February 7.30AM – German Trade Balance report

15.00PM:  Chairman of Fed – Ben Bernanke testifies

15.30PM:  EIA report about Crude oil inventories


13.30PM – Department of Labor report – US unemployment claims

15.30PM – EIA report about Natural gas storage

19.00PM – Report on American Federal budget balance

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