Currently, oil futures prices are trading above $85.90/bbl with a marginal gain from yesterday’s closing. A large decline in crude oil stocks in the last week has made this spike in oil prices on yesterday. However, on the other side economic concerns due to lower demand and drops in growth forecast from major oil consuming nations are limiting the gain in oil prices. Most of the Asian equities are trading down as unexpected. A fall in Australian job rates was reported today. In addition to this, interest rate cut has been declared by Korea government.
The seventeen nation currency Euro is under pressure, which may weigh on oil futures prices. Other than this, from economic data front US weekly jobless claims data are due for today. Monthly budget statement of US may contract which may create further concern for growth of nation economy. Most importantly, no hint of monetary stimulus was seen by FOMC minutes which may play a role on oil prices. On other side, the drawdown of crude oil stocks may add some positive points in oil prices.
Currently, gas futures prices are trading above $2.856/mmbtu with gain of near 0.30 percent in Globex electronic platform. Today we may expect gas prices to continue the positive trend supported by its intrinsic fundamentals. As per National Hurricane centre, tropical storm Ellen has been strengthen with 100 knots in Eastern Pacific region, which may create supply concern to add positive direction in on gas prices. As per US Energy department, natural gas storage is expected to increase by 33 BCF in the last week.
Consumption of power sector has also increased by 1.5 percent, which may support gas prices to remain on higher side. As per US weather forecast, temperature is expected to remain high in eastern region, which may create demand for gas consumption. There has been no word on the request from the Japanese government to import natural gas from the US, which might push prices upwards if and when approved. The Administration and the EIA are looking at the proposal favorably.
