WTI crude oil price bounced back and moderately inclined yesterday.
Today, the core retail sales of Canada will be published along with the U.S. existing home sales – these news items may affect the financial markets.
Let’s review and analyze the crude oil market for today, June 21st:
Crude oil prices – June 2011
Yesterday, June 20th crude oil price (WTI) inclined by 0.27% to $93.26; during June (UTD) WTI spot oil shed 9.2% from its value.
Brent oil price, on the other hand, declined by 1.51% to $111.78; during June Brent oil dropped by 4.6%.
The premium of Brent oil over WTI spot oil
The premium of Brent oil over WTI spot oil changed direction and declined yesterday June 20th to $18.52/b – the lowest level since June 9th; nonetheless, it rose by 27.9% during June.
Despite the recent decline in crude oil prices, Brent oil maintains a high premium level over WTI spot oil; this finding suggests the European oil market is tightening compared with the U.S. oil market.
The variance of the daily changes in premium of Brent oil over WTI inclined during June to its highest level since February 2011.
The Greek debt crisis update
Following yesterday’s meeting of the Euro Area finance ministers, they have agreed to push Greece to cut its budget deficit and start selling its assets. They didn’t reach a full agreement as to whether they will grant Greece the 12 billion euros by July as part of the bailout settlement. Currently, it seems this recent meeting eased the speculation around the Greek debt and resulted in moderate changes of the Euro/USD.
The Euros to US dollar and crude oil prices
During April and May Euros to US dollar exchange rate was strongly correlated with crude oil prices. Despite the instability of this relation, it seems to hold up during June 2011.
This correlation shows that as the weak Euro and the strong US dollar might have also affected the recent decline in crude oil prices. If the Euro/USD will start to pick up, it may have a positive affect on crude oil prices and oil prices may rise.
Current crude oil prices
Major crude oil prices are currently traded up at the Asian markets:
The Nymex crude oil price, short term futures (July 2011 delivery) is traded at $94.12 / barrel, a $0.86/b increase or 0.92%, as of 06:24*.
The Dated Brent spot oil price inclines by $0.39/b to $112.17 / barrel as of 06:35*.
Thus, the current premium of Brent over WTI is at $18.05/b.
Crude Oil price outlook and analysis:
The concerns over the Greek debt continue to affect not only the Euro/USD but also other indexes and prices including crude oil prices.
As the concerns over the Greek debt will subside, so will the adverse affect this news will have on crude oil prices.
I still think crude oil prices will remain high in the mid term.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
2:30 – Monetary Policy meeting Australia’s Bank
13:30 – Core retails sales Canada (April 2011)
15:00 – U.S. existing home sales
15:30 – EIA report about Crude oil inventories
17:30 – Decision on Federal Reverse’s Interest Rate
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