Crude oil prices will continue to trade downwards as a stronger US dollar pushes oil ever lower, whilst Europe’s debt crisis will no doubt have a negative effect on oil demand across the region.
Latest WTI Oil Price
US Light crude oil futures for August 2012 delivery was trading at $83.88 a barrel, 10.53 GMT today in trading on the NYMEX, or near a nine month low.
US Stock Futures Lower
US stock market futures reversed gains and turned lower Monday, tracking a similar pullback for European markets as initial enthusiasm over a likely victory for the top pro austerity party in Greece was replaced by a resurgence in worries over Spain’s high government bond yield rates.
“The market knows this is about buying time and as the main story is now Spain, and with Greek elections moving to Page 5 and 6 we need more details on Spanish banking reports and Germany’s intention,” said Jakobsen in emailed comments.
“It’s more concerning that now, less than two hours into trading in Europe, Spain is back in focus,” said Jakobsen.
Oil Price Forecasts Slashed
A severe bout of risk aversion will continue to pressure crude oil prices this year and next as traders cast nervous eyes on a volatile European debt scenario and persistent OPEC supply pulling down commodity prices.
An increasing flow of oil from OPEC member countries and the US will chop pricing support for oil as inventory builds exceed demand, said FirstEnergy Capital Corp. in a report released on Friday.
“There are numerous non-fundamental financial and macroeconomic factors that we expect will be playing havoc with crude oil market sentiment into the end of 2012 at a minimum, and act as a drag on crude oil prices,” analyst Martin King said in the report.
The investment brokerage cut its 2012 average US oil price outlook to $91 US per barrel from $105 US, with next year’s averages cut by $15 to $105.82 US per barrel but the new forecasts seem to be top heavy and too high as the current crisis in Europe sees no end in sight.
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Oil prices will continue to trade downwards as Europe’s debt crisis sees no end in sight
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