We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
More View more
Real Time News
  • #Dow Jones hits record high, however, central bank liquidity prompts volatility implosion. #FTSE 100 among underperformers with focus remaining on politics. Get your #equities market update from @JMcQueenFX here: https://t.co/EOFleGSeBp https://t.co/ecAyfSUeAM
  • RT @C_Barraud: 🇪🇺 #ECB’s Muller Says More Assets Could Join Stimulus List in Slump - Bloomberg https://t.co/roGEgu0VTQ
  • With increasing volatility in weather patterns, how might storms, hurricanes and floods rattle the supply chain for petroleum-based products and impact crude oil prices? Find out from @JStanleyFX here:https://t.co/O4dgBl47fq https://t.co/OQYqZAYt9S
  • Currency Strategist,@PaulRobinsonFX is a Swing trader. What is your #tradingstyle? Take the quiz and let us know: https://t.co/LPBOcS0Vtd https://t.co/WzRYeqRhUL
  • Despite what your #tradingstyle is, you should be keeping a trading journal. How can you start keeping a trading journal? Find out: https://t.co/0akgWbyJEw https://t.co/4ehMlN4zv1
  • The Euro’s struggle to move higher against a range of currencies continues and without further support this is likely to continue into the year-end. Get your $EURUSD market update from @nickcawley1 here: https://t.co/myZ7R0eGUb https://t.co/12WJd53Cx4
  • The #Dow Jones moved confidently higher last week as it added onto recent gains. Now, #stocks will aim to continue their rally while enjoying support from prior all-time highs. Get your technical analysis on #equities from @PeterHanksFX here: https://t.co/Qb89HIWxBY https://t.co/HMguTvD157
  • How can you trade #forex after a major release? Find out: https://t.co/sdxcXb8q60 #tradingstyle https://t.co/LNcbvVhIc2
  • Have you been catching on your @DailyFX #podcast "Global Markets Decoded"? Catch up on them now, before new episodes release! https://t.co/mk1w1DM2Rh https://t.co/m763epaH2C
  • Crude #oil prices, $NOK and $SEK may rise if Donald Trump’s speech on trade war developments amplifies market buoyancy against the backdrop of critical US CPI and retails sales data. Get your market update from @ZabelinDimitri here:https://t.co/5rdK7xsQNq https://t.co/YnlQjKNZdS
Guest Commentary: Oil Prices Daily Outlook 05.24.2011

Guest Commentary: Oil Prices Daily Outlook 05.24.2011

2011-05-24 14:53:00
Lior Cohen, Energy Analyst for Trading NRG,

Oil Prices Daily Outlook 24 May

Oil prices started off the week with falls, as the speculation around the supply and demand side is high.

Let's examine the recent news related to oil trading for today, May 24th:

Oil Prices – May

Yesterday, May 23rd, the WTI crude oil prices declined very sharply by 2.25%; During May, up to yesterday, WTI decreased by 14.2%.

Brent price also declined by 2.41%; during May Brent oil declined by 13.1%.

The chart below of the normalized WTI and Brent during May 2011 shows that these energy commodities fell sharply at the beginning of May, and since then they fluctuated within the 6 to 7 percent range.

Guest_Commentary_Oil_Prices_Daily_Outlook_05.24.2011_body_Crude_spot_oil_prices_2011_Brent_oil_and_WTI_spot_oil__2011_May_24.png, Guest Commentary: Oil Prices Daily Outlook 05.24.2011

The gap between Brent over WTI reached on Monday, May 23rd 12.81$/b. Despite the moderate changes in this premium in the recent few days, during May, the premium shifted and fluctuated very rapidly and ranged between 12 and 17.8$.

Guest_Commentary_Oil_Prices_Daily_Outlook_05.24.2011_body_Difference_between_Brent_and_WTI_crude_spot_oil_price_2011_May_24.png, Guest Commentary: Oil Prices Daily Outlook 05.24.2011

Major Currencies and Oil Prices during May

During May, up to date, the strongest correlation between oil and major currencies is still between Euro / US dollar and WTI prices, and USD/ CAD and WTI prices, as seen in the chart below.

Guest_Commentary_Oil_Prices_Daily_Outlook_05.24.2011_body_Correlations_wti_and_Brent_spot_oil_prices_with_MAJOR_CURRENCIES_MAY_24_2011.png, Guest Commentary: Oil Prices Daily Outlook 05.24.2011

Yesterday, these major currencies fell very sharply, as the US dollar gained on them: the Euro / US dollar fell sharply by 0.8% and reached 1.4048; USD/ CAD rose by 0.38%; and AUD/USD fell very sharply by 1.45%.

These changes coincide with the falls of oil yesterday and their linear correlation during May as seen in the chart above.

During May, Euro / US dollar fell by 5.13%, the AUD/USD declined by 4.25% and the USD/CAD rose by 3.5%.

These falls in EURO/USD are probably related to the concerns over the European debt crisis and the AUD/USD falls is probably related to the uncertainty around the future growth rate of China's economy and demand for oil from Australia.

Goldman Sachs and Morgan Stanly Raise Their Oil Price Forecast

Despite the falls in oil at the beginning of May, Bloomberg reports that Goldman Sachs and Morgan Stanly have raised their forecasts on oil; one of the reasons they think oil will incline comes from the supply side, in particular the drop in oil production of OPEC mainly due to Libya.

Morgan Stanley raised it projections on the average Brent oil price by 20% to $120 a barrel for 2011; Goldman Sachs raised its annual oil price estimate for the European benchmark contract to $130 a barrel and recommended investors to go long on Brent oil for December 2012 contracts.

Upcoming OPEC Meeting on June 8th

The speculation around the upcoming OPEC meeting on June 8th, in Vienna Austria continues to be high; the main question is whether OPEC will decide to raise its reported oil production or not. Since Libya's civil war started back in February, Libya's oil production fell from 1.6 million bbl/d back in January 2011 to an estimated oil production of only of 0.24 million bbl/d in April 2011.

According to the recent OPEC report regarding April 2011, the total OPEC oil production reached 28.985 million bbl/d nearly the same level as in March, but it's nearly 3.2% below the oil production level as in February 2011.

The report also shows that the world oil supply is expected to rise by 1.63% in 2011, compared to 2010- mainly due to rising demand in China, which is expected to incline by 6.29%.

This is why it's imperative for OPEC to raise its oil production in the months to come; otherwise, it might further tighten the oil market – mainly in Europe and Asia, and consequentially further pressure oil prices up.

World News – Oil Markets


The debt crisis in Europe continues: according to Bloomberg, the Greek 10-year government bonds declined very sharply on May 20th and thus the speculation around Greece's capability in returning its debt is high.

There are also speculations around Europe's manufacturing growth rate as it is expected to slow down in May. This might suggest that Europe's demand for oil for manufacturing purposes is falling.

Middle East

For the recent news about Middle East see here.

Oil Price Outlook:

Oil prices declined yesterday, but are currently traded up; this zigzag in oil prices' direction shows that the market keeps on staying put at the current prices' level.

The speculation around the future the supply and demand is still high:

Demand- the future demand of major countries' oil consumption including U.S., Europe, Japan and China;

Supply - OPEC's future oil production isn't clear yet, and if OPEC will decide not to raise its output target, this might further push oil prices.

I still speculate that in the short term all these concerns will continue to pull oil prices in different directions and eventually keep oil prices at their current high prices.

Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):


23.50 – Report of Japanese Trade balance (for April)


Tentative – Publishing the US Treasury Currency Report by the Department of Treasury

13.30 – US Department of Commerce – Report on Durable Goods

15.30 – EIA report about Crude oil inventories

For further reading:Weekly outlook for May 23-27

By: Lior Cohen, Energy Analyst for Trading NRG

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.