Crude oil prices continue to seek direction as WTI spot oil price gained only 0.9% to its value since July 7th up to date; Brent oil price, over the same period gained only 0.3%. Today, the U.S. durable goods report will be published, the EIA petroleum stocks report and the Euro Area Monetary development report.
Here’s a short analysis and outlook of the crude oil market for today, July 27th:
Crude oil prices – July 2011
On Tuesday, July 26th crude oil price (WTI) bounced back and inclined by 0.63% to $99.59/b; during July WTI spot oil inclined by 4.5%.
Brent oil price also rose 0.26% to $117.75/b; during July Brent oil rose by 5.41%.
The chart below shows the normalized prices of WTI spot oil and Brent oil during July (June 30th=100). It shows the lack of trend for Brent oil price since July 7th, and the very moderate upward trend of WTI spot oil in recent weeks.
Premium of Brent oil over WTI spot oil
The premium of Brent oil over WTI spot oil keeps on falling as WTI spot oil price is moderately outperforming Brent oil prices in recent weeks; on Tuesday July 26th the premium reached $18.16/b – its lowest level since July 6th; that being said, during July this premium rose by 10.66%, mainly because Brent oil price outperformed WTI spot oil price at the first week of July.
U.S. consumer confidence:
Yesterday the consumer confidence report was published and showed a slight increase in the July report compared with June’s report; the consumer confidence index inclined by3.2% compared with June’s index. Historically, this report had some significant positive affect on crude oil prices, i.e. as the consumer confidence index inclined so did crude oil prices (even with U.S. dollar control). Yesterday, crude oil prices moderately inclined but since it was a slight increase, it’s hard to pinpoint if this shift was caused by the US consumer report or just white noise.
Petroleum stocks in the US
The US Energy Information Administration will publish its weekly report on U.S. petroleum stocks: according to Bloomberg the U.S. crude oil stocks declined last week by 400 thousand barrels. For the week ending on July 15th crude oil stocks inclined by 3.8 million barrels, as they have reached 1,800 million barrels – the highest stockpiles since February 4th, 2011 (See here the previous petroleum report).
US dollar / Crude oil prices – July update
On Tuesday, Euro to US dollar exchange rate rose by 0.93%; furthermore, the Australian dollar to US dollar rose by 1.03% and US dollar to Canadian dollar moderately declined by 0.30%. This direction might continue as the concerns of the U.S. debt ceiling continue to stir up the financial news (see here for further elaboration on the debt ceiling talks). Therefore, if the U.S. dollar will continue to depreciate against major currencies, it may further strengthen crude oil and drive its prices up.
Current crude oil prices
Major crude oil prices are currently traded with mixed trend in the U.S. market:
The Nymex crude oil price, short term futures (August 2011 delivery) is traded at $98.69 / barrel, a $0.90/b decrease or 0.90%, as of 14:22*.
The Dated Brent spot oil price inclines by $0.06/b to $117.81/ barrel as of 14:33*.
Thus, the current premium of Brent over WTI is at $19.12/b.
Crude oil price outlook and analysis:
Crude oil prices continue to zigzag with no clear direction; in the short term, crude oil price are likely to remain near $97-$100 for WTI spot oil and $117-$118 for Brent oil.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
09.00 – Monetary developments in the euro area
13:30 – US Department of Commerce – Report on Durable Goods
15:30 – EIA report about Crude oil inventories
13:30 – Department of Labor report – U.S. unemployment claims
15:00 – U.S. pending home sales
15:30 – EIA report about Natural gas storage
For further reading:
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.