Crude oil futures prices are trading above $86/bbl in electronic platform with gain of more than 2 percent. Oil prices have gained on speculation of higher oil demand from European countries as Spain have requested for bailout to shore up its banks. Spain finance minister have told that it will seek $125 billion. The impact is also seen in Asian equity market, which is up by more than 1.5 percent on average basis. The seventeen nation currency Euro is at 1.2632 levels, up by near 1 percent. So, we may expect Oil futures to open in a higher note in markets driven by above factors.
Other than this, crude oil import from China has also increased by more than 10 percent in the month of May. Thus, rise in crude oil import from world’s second largest oil consuming nation may add some points in oil prices trend. Most importantly, oil market is waiting for the OPEC Meet on 14th June, where production quota will be declared.
On the back of negative eco data out of China over the weekend, including CPI and PPI as well as retail sales and industrial production all falling below forecast, we should see an overall weakness in oil prices.
Iran and Venezuela have criticized other members of the cartel for producing more than the existing quota of 30 million barrels a day of oil. However, production quota cut is also an indication of lower demand, which may limit the gain in oil prices. Algeria has called for all OPEC nations to reduce production to agreed upon levels.
There are no major economic releases due for today to drive oil prices. Overall, we may expect prices to open in a higher note, whereas gains may be limited ahead of OPEC meet speculation.
Currently, gas futures prices are trading below $2.263/mmbtu with loss of more than 1.2 percent in electronic trading. As per US Energy department, Demand from Residential sector is expected to decline in comparison to last year, as this year summer season is going to be less severe on account of lower number of Cooling Degree Days expectation, reported by EIA. Currently, the storage level is at 2877 BCF, positioned storage volumes 732 Bcf above year-ago levels. In the coming week, also the injection level is likely to increase on the back of rising supply and lower demand, which may weigh on gas prices. Most importantly, As per National Hurricane Centre, as of now there is no tropical storm formation is seen in North Atlantic region. Normal temperature in consuming region of US, may pressurize gas demand for the day.