Is There Any Hope For Crude Oil & Natural Gas To Rally?

By:

Updated: Aug 23, 2015, 10:00 GMT+00:00

Crude oil began to ease as the week started and should continue over the next 24-48 on lackluster trade data and inflation numbers from China and

Is There Any Hope For Crude Oil & Natural Gas To Rally?

C

rude oil began to ease as the week started and should continue over the next 24-48 on lackluster trade data and inflation numbers from China and disappointing numbers from Japan. Crude oil is trading at 102.33 downy by 26 cents. Brent oil also tumbled giving up 57 cents to touch 107.89 with the spread narrowing to close to $5.00. The lackluster trade numbers from China should weigh on the energy markets as disappointing exports will eventually show a drop in industrial production and manufacturing. Last week global oil price (WTI and Brent) remained nearly flat. WTI oil inched down by 0.01% while Brent oil fell by 0.06%. As a result, the difference of Brent oil over WTI moderately narrowed: The premium ranged between $5.97 and $6.42.On Wednesday the EIA’s weekly update showed a modest rise in oil’s stockpiles of 2.2 million barrels. During the previous week, crude oil price (WTI) inched down by 0.01% and reached by Friday $102.58 further, Brent oil slipped by 0.06% to $109.

Oil imports increased by 0.8% last week. Further, oil production inched up by 0.1%; the total supply rose by 0.4%. At the same time refinery inputs edged up by 0.3% last week. In total, the demand was still lower than the supply, and the difference between supply and demand widened. This current difference may drag down oil prices as the U.S oil market is moderately loosened last week.

Nymex crude oil prices traded on a flat note in the last week on the back of geopolitical tensions between Ukraine and Russia which is the world’s largest energy exporter, led to concerns of supply disruption. However, gains were wiped off due to rise in US and API crude oil inventories. Further, decline in US refinery activity along with rise in US crude oil production acted as a negative factor.

This morning trade numbers and GDP from Japan disappointed traders and will affect the implied demand for crude oil.

US natural gas tumbled 35 points as the markets opened this morning to trade at 4.586 as winter days are quickly passing and Accuweather is now calling for an early spring. The winter storm covering the US Midwest and East coast dissipated while warmer temperatures begin to set in. Nymex natural gas prices gained around 0.4 percent last week on the back of more than expected decline in US natural gas inventories. However, sharp upside in the prices was capped due to estimates of less cool winter weather conditions going forward. Gas prices touched a weekly high of $4.658/mmbtu and closed at $4.662/mmbtu in the last trading session. Heating oil lost 120 points to trade at 2.9864