Crude oil prices moderately inclined yesterday. The EIA natural gas market report was published yesterday and presented an increase in natural gas storage of 43 Bcf. Today, the Euro Area inflation rate will be published, the U.S. advance estimate of second quarter of GDP (update US GDP grew by 1.3%; see here for more) and Canada’s GDP by industry.
Here’s a short analysis and outlook of the crude oil market for today, July 29th:
Crude oil prices – July 2011
On Thursday, July 28th crude oil price (WTI) inclined by 0.04% to $97.44/b; during July WTI spot oil inclined by 2.25%.
Brent oil price also rose 0.03% to $117.14/b; during July Brent oil inclined by 4.86%.
The chart below presents the prices of WTI spot oil and Brent oil during May to July. It shows the small changes these energy commodities had in recent days, after they had risen sharply during the first week of July.
Premium of Brent oil over WTI spot oil
The premium of Brent oil over WTI spot oil didn’t change yesterday and remained on Thursday July 28th at $19.70/b; during July this premium rose by 20.05%, mainly because Brent oil price outperformed WTI spot oil price at the first week of July.
US GDP second quarter
According to early speculations, the upcoming US GDP growth rate will remain near the 1.5-2.0% rate. During 1Q 2011 the annual growth rate was 1.9% growth – a decline from a 3.1% annual growth rate during 4Q 2010. If there will be an increase in growth rate above expectations it might strengthen the US dollar and consequently weaken crude oil prices in the short term.
This report regards growth in major industrial sectors for May 2011. In the previous report pertaining April 2011, the real gross domestic product remained unchanged after it had risen by 0.3% during Match 2011. This report could affect the strength of Canadian dollar and consequently crude oil prices that are strongly correlated with this currency.
US dollar / Crude oil prices – July update
On Thursday, Euro to US dollar exchange rate fell by 0.24%; the Australian dollar to US dollar fell by 0.15%; on the other hand, the US dollar to Canadian dollar declined by 0.05%. This means that US dollar moderately appreciated against the Euro and AUD, but slightly depreciated against the CAD. The U.S. debt ceiling talks continue to occupy the financial news even though this news seem to have little effect in recent days on the oil prices or major currencies.
U.S. natural gas market report
The US Energy Information Administration published its weekly report on U.S. natural gas market review: according to the report the U.S. underground natural gas storage (Billion Cubic Feet) inclined by 43 Bcf to 2,714 billion cubic feet for all lower 48 states – the highest stock level since January 14th, 2011; the natural gas storage is still 2.3% below the 5-year average, and 6.9% below the storage level during the same week in 2010 (See here the recent natural gas report).Current crude oil prices
Major crude oil prices are currently traded down in the European market:
The Nymex crude oil price, short term futures (August 2011 delivery) is traded at $96.77 / barrel, a $0.67/b decrease or 0.69%, as of 09:04*.
The Dated Brent spot oil price declines by $0.2/b to $116.94/ barrel as of 09:15*.
Thus, the current premium of Brent over WTI is at $20.17/b.
Crude oil price outlook and analysis:
Crude oil prices continue to moderately fluctuate; 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 (all times GMT):
10.00 – Euro Area annual inflation (July)
13:30 – Canada GDP by industry
13.30 – Bureau of Economic Analysis – US second quarter advance GDP
For further reading:
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.