Crude oil is trading near seven week’s high of $92/bbl in the Asian session on concern of supply disturbance in Gulf coast region. The National Hurricane center reported that tropical storm Ernesto might become hurricane today located near the Gulf coast region in US. Heightening concerns of supply disturbances might be supporting oil prices.
News from Sudan and South Sudan, that they are reaching amicable agreements over the distribution of oil rights should help ease prices, although Sudan produces a very small amount of the global supply, it still have an effect.
Rumors of an attack on the Syrian leaders have stoked geopolitical concerns, with the Syrian Prime Minister defecting. Syria produces little oil, but is the home of several major pipelines moving through the area.
From economic data front, manufacturing and industrial activities in UK are likely to fall. Likewise Germany factory orders are also expected to contract further in last month which may add pressure in euro.
Declines in manufacturing and production also will place pressure on crude prices, with lower demand and consumption.
Traders expect the euro to regain throughout the day as German Chancellor Angel Markel supported the bond buying program of ECB to restrict the rising yield of Spain and Italy. Other than this, Greece is going to meet the troika body in order to discuss the things regarding budget saving program. These factors may support the euro and ultimately crude prices.
On Thursday, the Bank of Japan will announce their rate and policy decisions. The marquee event of the week will be the release of a slew of Chinese data on Thursday and Friday, including trade balance, retail sales and money flows. These releases will have effects on oil prices as China is the 3rd largest consumer in the world.
Markets can expect oil prices to remain on positive trend in today session.
This morning natural gas futures prices are trading above $2.910 MMBTU with gain of more than 0.20 percent in electronic platform. As stated above the National Hurricane center is reporting that tropical storm Ernesto might become a hurricane today near Gulf coast region in US. Concern of supply disturbances might be supporting gas prices. Chesapeake Energy Corporation, US largest energy industry has reported about record high quarterly profit on yesterday. Chesapeake was recently in the news over scandals, in which the CEO was using company money for personal investments. The issue is still not completely resolved, but it forced the stock to tumble and government investigations are underway. This may drive gas prices higher as upstream industry making profit. Producers have long held out that natural gas needs to be priced over $3.00 to be profitable.
As per EIA, natural gas storage has increased by 28 BCF, higher than prior week; may have negative impact on gas prices. Natural gas consumed for power generation (power burn) declined slightly for the report week that is more than 3 percent. Declining demand may continue to weigh on gas prices in today’s session.
Click here a current Crude Oil Chart.
Originally posted here
