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Crude oil prices have slipped by more than 0.60 percent from yesterday’s closing and trading at $92.06/bbl in the international market. Oil prices declined from its nine week high on concern of lower seasonal demand due to slow economic growth in major oil consuming nation US. The existing home sales data in the month of June dropped unexpectedly. Likewise Philadelphia fed manufacturing index declined to -12.90 levels, indicating lower manufacturing activities.
Most of the Asian equities are trading tight on concern of slowdown in worlds’ major economy. Organizations of Petroleum Exporting Countries are likely to cut exports by 0.9 percent to 23.78 million barrels in over the next month as the seasonal demand for driving fuels fades. Expect theses above factors may continue to weigh on oil futures prices.
On the other side, we have to give importance to ongoing civilian war in Syria. The UN failed to stop the bloodshed in Syria, reported on yesterday. Thus, rising rebels in heart of Middle East Syria is creating concern of oil supply disturbances which may drive oil prices higher.
Tensions between Iran and Israel have skyrocketed this week after a terrorist attack on a bus carrying Israeli tourist in Bulgaria has been blamed on Iranians. This tension is helping to support the rising prices.
From economic data front, German Producer Price index is likely to go up in the last month which may also support oil to take some positive cues during European session.
Natural Gas prices are trading above $3/mmbtu with gain of near 0.50 percent in Globex electronic platform. Today we may expect gas prices to continue the positive trend supported by its intrinsic fundamentals. Cooling demand in the US may be 20 percent above normal from July 25 through 29, data from Weather Derivatives in Belton, Missouri show. The dry soil of the Midwest will help make the summer of 2012 one of the three warmest in the US and southern Canada since 1950, according to Accu-Weather. As per US Energy department, natural gas storage has increased by 28 BCF in the last week, lower than expectation which may continue to support gas prices. Traders are surprised to see prices move so high and hold, speculators are holding tight, not taking profit.