Author: tomsoop

The front-month contract for WTI crude oil soared to a 4-month high of 101.38 on in the midweek before retreating and ending the week at 100.3. Adding +0.42% on weekly basis, the gain was supported by strong domestic demand and refinery runs. For instance, Crude storage at Cushing fell -2.6 mmb while Gulf Coast refinery runs rose +200K bpd during the week. We believe price would be rather range-bounded in coming weeks.

Originally posted here:
Weekly Fundamentals – Crude Oil’s Rise to Lose Steam, Range-bound Trading Expected in Coming Weeks

The price of Brent crude dropped back down to $108 a barrel in trading this afternoon following an unexpected drop in US retail sales and a spike in jobless claims have raised doubts over growth in the US and undermined expectations of higher global oil demand growth this year.

Latest Brent Oil Price

In London, Brent crude oil futures for April 2014 delivery was trading at $108.18 a barrel, 14:25 GMT today on the ICE Futures Exchange. The March futures contract for European Brent expired yesterday.

US Data

US retail sales fell unexpectedly in January and more Americans filed for jobless benefits last week, the latest signs the world’s biggest economy started the year on a softer footing as bad weather took its toll.

Meanwhile, the US dollar was pinned at three week lows against a basket of major currencies early on Friday after the disappointingly soft US data dealt a blow to the already struggling American dollar.

Drained Oil Inventories

However, the IEA (International Energy Agency) reported yesterday that stronger than expected demand has drained oil inventories to the lowest level since 2008, tightening the market and defying predictions of a glut, effectively propping up oil prices to some extent. A weaker dollar is also helping Brent crude stay well above the $100 level for now.

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Brent oil price hovers lower near $108 on weak US economic data, dollar

US economic data surprised to the downside with retail sales contracting in both December and January and initial jobless claims surprisingly increased last week. Disappointing economic data initially pressured the stock markets and crude oil prices but losses were pared as investors believed that the Fed’s tapering schedule would not be deferred.

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Fed’s Tapering Unlikely Affected Despite Disappointing Data

Gold drops for a third consecutive day after a temporary correction over the past 2 weeks. We retain our bearishness on the yellow metal this year as Fed’s tapering of QE measures and better economic outlook should weigh on gold. Strength in the USD, decline in equity risk premium and rise in bond yields are factors sending gold lower this year.

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Strong USD, Better Market Sentiment and Rising US Yields Pressure Gold

Wall Street slipped for the first time in 8 days ahead of Fed Chairman Ben Bernanke’s testimony before the Congress. Earnings data were mixed with Goldman Sachs beating expectations while Coke missed consensus.

Continued here: 
Mixed US Data Sent Stocks Lower, Bernanke’s Testimony in Focus

Sentiment has been buoyed by generally encouraging data on manufacturing activities across the board. Wall Street firmed with the DJIA and the S&P 500 indices gaining +0.44% and +0.54% respectively. Asian shares also rose with the Nikkei adding +0.81% in the morning session.

More here:
Encouraging PMI Data Boost Sentiment

Financial markets soared in Asian session on Monday as driven by better-than-expected US employment report which immediately upstaged the disappointing work week data. Wall Street climbed higher with the DJIA and the S&P 500 indices gaining +0.96% and +1.05% respectively. Shares in Asia today are generally higher.

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Sentiment Lifted by Improved US Job Market

European ICE Brent oil futures made gains in trading on Wednesday, spurred on by comments from Iran’s Oil Ministry spokesman that any price lower than $100 a barrel for crude Oil would be definitely unreasonable.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2013 delivery was trading at $101.07 a barrel, 10:27 GMT this morning on the ICE Futures Exchange, or 0.8 percent up from this mornings open.

Iran Hints at Minimum Price Level

Iran’s Oil Ministry spokesman said yesterday that crude oil prices below $100 a barrel is “unreasonable” Press TV reported. Alireza Nikzad-Rahbar said that Tehran is discussing falling crude oil prices with all member states of the OPEC particularly with Saudi Arabia, said the report.

Unanimous at $100

Members of the OPEC are all unanimous on US$ 100 or higher for a barrel of crude oil, said Mr. Nikzad-Rahbar, adding that “Negotiations and consultations have begun with OPEC members and it is likely that an agreement could be reached between the members without holding any extraordinary meeting. Under the present circumstances, 100 is a reasonable price for crude oil. Any price lower than 100 bbl for crude oil would be definitely unreasonable,” he was quoted as saying.

Last week, the Iranian Oil Minister commented “We are monitoring oil price in the world markets and in case the price drops below 100 US dollars, negotiations will be held with other OPEC members to hold an emergency meeting.”

At the beginning of 2012, the United States and the European Union imposed new sanctions on Iran’s oil and financial sectors.

Fear of OPEC Cut

There are possibilities that OPEC may cut oil supply/output if prices fall further. “Saudi Arabia has said they prefer $100 Brent so expectations are if prices fell below $100, OPEC would cut production,” Mitsubishi Corporation risk manager Tony Nunan said.

However, Brent oil prices are still averaging about $110 this year, possibly easing the pressure for any output cut, while global oil markets would have passed the weakest point in annual demand by end-May, Mr Nunan said.

According to news reports, Venezuela’s top oil official said Thursday that OPEC officials were weighing holding a special meeting on the market if oil prices continue to fall further.

Here is the original: 
ICE Brent oil gains helped by comments out of Iran concerning prices