Today is a very crucial day forglobal financial market, as the whole globe is waiting for the Greece election result. As of now, with 37.4 percent of the vote counted, official results showed the conservative New Democracy with 30.5 percent of the vote, ahead of the radical anti-bailout Syria party’s 26 percent and the pro-bailout Socialist PASOK with 12.9 percent. So, winning of pro bailout party is easing the concern of Greece exit from Euro area and holding the market ion upside. Most of the Asian equities are trading with gain of near 2 percent and so Oil prices have moved up above 1 percent near $85/bbl in early trading. However, actual result will be releasing after 10:00 IST, which may change the market movement.
Overall, most of the strain on the markets has passed as the outcome of the elections assures investors of Greece’s desire to remain in the EU, the EU will surely be forced to renegotiate the terms of the bailout, but none the less, the world, the EU and Greece live on.
Spain and Italy are about to move back to center stage, where problems continue to brew.
Other than this, Central bank of China has said that the second largest oil consuming nation will growth will be stable in the coming quarter. Ahead of G-20 meet starting from today; oil prices may take some positive cues on expectation of economic growth with less austerity measures.
In addition to these above factors, major event for oil market i.e. third round of nuclear talk is going to held in 18-19 Jun. Supply disturbance is expected on the back of Iran nuclear program talk as UN watch dogs have not yet got full permission for investigation in Iran which is creating concern of hazardous nuclear program. Thus, tightening of sanction may come up on Iran due to its hazardous nuclear program, which may support oil in a positive direction. As per National Hurricane centre, there are10 and 20 percent chance of tropical storm formation near gulf coast region which may create supply concern to add positive direction in oil prices.
Currently, gas futures prices are trading above $2.535/mmbtu with gain of more than 1 percent in electronic trading. Today we may expect gas prices to continue the positive trend supported by its intrinsic fundamentals. As per National Hurricane centre, there are10 and 20 percent chance of tropical storm formation near gulf coast region which may create supply concern to add positive direction in on gas prices. As per US Energy department, natural gas storage has been increased by 67 BCF in the last week, which is lower than last 5 weeks average at this time. Consumption of power sector have also increased by 6 percent , which may support gas prices to remain on higher side.