Oil Prices Stablizing

Crude oil moved up a bit as traders took advantage of low prices to purchase the commodity. Crude added 20 cents in the morning session to trade at 44.86 as Brent oil remained below the $50 price level at 49.766 today.

The main market focus today is the U.S. non-farm payrolls data, due out in the US session, for an indication whether the economy has rebounded enough to allow the Federal Reserve to raise interest rates. Many investors believe higher rates will buoy the dollar and weigh on copper, which is priced in the U.S. currency and becomes more expensive to foreign buyers when the greenback appreciates.

Questions are hanging over world markets and making it hard for crops and other commodities to rally. Prices will probably continue to languish until those questions are answered or stop worrying markets, some analysts’ say.
“I don’t think there’s enough catalyst for everything to rebound,” said FarmLead founder Brennan Turner.

The uncertainty over China and its ongoing economic slowdown and recent stock market sharp tumble is important to Turner, who thinks commodities, including crops, need a positive demand growth outlook to substantially rally.


Oil set multi-month lows on Thursday as investors and traders sought clues about the market’s next bottom after a large drop in US crude inventories failed to boost prices. A bigger-than-expected build in US gasoline stockpiles last week proved more important to investors than crude storage numbers that came in three times below forecast on Wednesday.


Goldman Sachs analysts said US shale drillers had dramatically reduced the time between committing capital and producing oil, so low prices must be sustained to curtail investments and allow supply-demand rebalancing to occur.

Crude inventories fell by 4.4 million barrels last week, versus forecasts for a 1.5 million drop. But gasoline stocks overshot, to 811,000 barrels, or 300,000 above expectations. The build came as US refiners processed gasoline and distillates, which include diesel, at record high rates last week, taking advantage of strong refining margins.

“If they continue to run at these levels, then we will see massive builds in distillates and gasoline stocks when the peak demand season is over for gasoline,” Saxo Bank senior commodity strategist Ole Hansen said.

In international markets Saudi Arabia has increased the price of Crude Oil it sells to Asia in September by less than forecast, traders said Thursday, as the world’s biggest Oil exporter defends its market share during slowing demand.

Refining profits have fallen to the lowest level of the year in Asia, prompting refiners to cut output even as the Organization of Petroleum Exporting Countries (OPEC) pumped at historic highs in July.

Saudi Arabia maintained output near record levels in July as the group show no sign of wavering in their focus on defending market share instead of prices.

State-run Oil firm Saudi Aramco was expected to raise official selling prices (OSP’s) for most grades by about 1.00 bbl. in September from the previous month on the back of a stronger Dubai benchmark, according to a survey this week.