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As markets began trading on Wednesday, WTI crude oil is trading almost flat at $96.7/bbl Crude oil prices climbed to a 3-month high, on speculation that euro-area leaders will make progress in resolving the region’s debt crisis at their meeting this week. China's crude oil imports from Iran fell nearly a third in July from an 11-month high in June, ensuring that the world's second-largest oil consumer continues to meet the terms of a waiver from the United States on financial sanctions.
Contraction in Japan’s export in the month of July reported today early morning is weighing on Asian equities market and so on oil prices have come under pressure. The American Petroleum Institute, reported that crude oil stocks has declined by more than 6 million barrels in the last week as import have fallen by more than 12 percent on weekly basis. Lower stock reports might be limiting the fall as crude oil price movement will most likely remain in a small range a day ahead of the crucial actual inventory report from US Energy department and minutes of FOMC minutes.
The US Energy Administration stated that crude oil stocks are likely to decline along gasoline inventory due to lower refinery utilization. So, expectation of declining stocks may add positive point in oil prices.
Traders will be closely eyeing and interpreting the FOMC minutes which will provide a full picture of US economic growth. Other than this, Greece Ministers will meet with Luxemburg politicians today and may create some volatility in the market by keeping the euro under pressure, which may limit the gain in oil prices.
From economic data front, US housing sales are likely to increase with improvement in mortgage application. A positive trend in US session is also expected. Last week US housing and building permits were viewed as a positive and home builder confidence soared. Today's release might have a final affect on stimulus from the Feds in their meeting next week.
Liquefied natural gas in the US is trading above $2.814/MMBTU with gain of more than 1% from yesterday’s closing. The US Energy department said natural gas storage is expected to increase by 39 BCF, almost double from last week’s storage data. US consumption has been fallen by more than 2.74 percent and demand declined by 2.43 percent in the last week. However, demand was at 11 percent high during the same period in the last year.
On the other side, declining consumption due to mild weather condition may weigh on gas prices in today’s session.
AccuWeather forecasts has shown that temperature is likely to remain normal which may not pull gas demand high. Higher storage expectation and concern of lower demand may continue to keep prices under pressure ahead of US crude inventory report later today and tomorrow's natural gas inventory.