By FXEmpire.com
This morning in early Asian session, WTI oil futures prices are trading below $90.50/bbl with fall of more than 0.30 percent in Globex electronic platform. Prevailing economic concern from Euro-zone is weighing on Global Financial market.
Most of the Asian equities are slumped driven by bearish sentiment from Euro-area. The seventeen nation’s currency Euro is trading at 1.2468 with fall of more than 0.20 percent as Spain pose a new threat for Euro-zone, which might be making oil prices to trade in lower side. We may expect oil prices to trade under pressure by taking negative cues from lower equity market and basically concern from Euro-zone. From economic data point, major confidence index from Euro-zone are expected to fall for the month of May. Thus, it may further weigh on Euro, which will ultimately drive oil prices lower side. From fundamental front, crude oil stocks level is likely to increase near 22 years high in the last week, whereas very minute draw down in petroleum stock is expected. Due to normal weather condition, summer demand is expected to fall as per US energy department, which may pressurize oil prices. As per National Hurricane Centre, there is no threat from tropical storm in North Atlantic Area. So, overall trend for oil prices is expected to under pressure.
Markets have been hurt by the Spanish woes of a destabilized banking. We therefore expect the commodity sector to dip further amid the Euro plight. Concerns are now shifting from Greece to Spain where new bonds will be issued to fund the distressed lenders and indebted regions. This may feed in to more anxiety as the country’s refinancing ability may push borrowing cost to over 7%, a level that is unsustainable.
The European commission today will be setting out its strategy pointed for Spain and Italy to balance growth with fiscal consolidation. Besides, reports today from the Euro zone are likely to indicate an obstructive business climate, while the economic, consumer and industrial confidence may remain faint
Currently, gas futures prices are trading above $2.496/mmbtu with a minute change of 0.30 percent in Globex electronic platform. We may expect gas futures prices to remain under pressure throughout the day on concern from declining consumption pattern by US consumer. There is no concern of tropical storm in Gulf areas, thus it may keep prices under pressure. Beginning of summer season may drive higher demand for Gasoline for summer driving demand which may weigh on the natural gas prices. ONGC is planning to increase its production which is another point for the lower side trend.
Click here to read Natural Gas Technical Analysis.
Originally posted here
