Brent & Crude Oil Range Trading

Crude oil continued its descent in the Asian session to fall 21 points to trade at 97.38 even though WTI seems to be making significant moves each morning the commodity remains fairly well embedded in the $97 price range, while Brent oil climbed back over the $104 price on Wednesday and is trading this morning at 104.60.

Asian markets are trading on a positive note today as a slowdown in the U.S. retail sales fueled bets the Federal Reserve won’t raise interest rates earlier than expected. The US Dollar Index gained 0.1 percent and inched higher on Wednesday and continued the trend early on Thursday to trade at 81.71, getting support from gains on Wall Street after a relatively quiet day on the geopolitical front. However, sharp gains were capped following unexpectedly flat U.S. retail sales in July that suggested the Federal Reserve was in no rush to raise interest rates any time soon. US Core Retail Sales gained 0.1 percent in July as compared to a rise of 0.4 percent in June. Retail Sales registered no growth in July as compared to a gain of 0.2 percent in June.

Yesterday oil gained on both sides of the Atlantic in choppy trading recovering from a 13-month low as turmoil in Iraq and Libya kept concerns about potential supply disruptions in focus. However, WTI oil prices pared gains after the U.S. Energy Information Administration (EIA) reported crude oil inventories rose 1.4 million barrels last week, against expectations stocks would be lower. The EIA released its weekly inventories report last night and US crude oil inventories rose by 1.4 million barrels for the week ending on 8th Aug2014. Gasoline stocks declined by 1.2 million barrels, whereas distillate inventories fell by 2.4 million barrels for the same time period.

Exports from Libya are recovering despite the recent unrest, with the first leaving the port of Ras Lanuf on Tuesday after a year-long harbor blockade. Unrest in Iraq has yet to disrupt significant amounts of oil, though some small fields have been shut in the autonomous Kurdish region. The United States has sent around 130 additional military personnel to Iraq as Washington seeks to help Baghdad contain the threat posed by militants.

On the production front, OPEC output rose to a five-month high above 30 million barrels per day (bpd) in July and U.S. crude production averaged an estimated 8.5 million bpd, according to reports from the International Energy Agency and the EIA.

Natural gas took a tumble on Wednesday as US weather moved back to cooler temperatures as summer vacation and driving season is coming to an end. Lower temperatures sent traders off to book profits as the commodity could not break the $4 resistance level. Traders will focus on today’s official inventory release due in the US trading session. Natural gas is trading at 3.821 after topping at 3.996 just 48 hours ago