Guest Commentary: Oil Prices Daily Outlook 09.15.2011
Oil Prices – Daily Outlook September 15
Oil prices changed directions again and fell yesterday, despite the ongoing rally of the US stock markets. The USD slightly depreciated against the Euro. This recent decline may just be a correction, as crude oil prices are currently traded up; WTI is still around the $85-$90 mark and Brent around the $110-$115.The EIA published its weekly report yesterday and oil stockpiles sharply fell by 7.7 million bbl. Today there are many reports and events on the agenda including: the Philly Fed Manufacturing Index, US unemployment claims, ECB President Trichet will hold a conference, Euro Area and US consumer price indexes reports and the EIA's weekly natural gas report.
On Wednesday, September 14th oil price (WTI) declined by 1.44% to $88.91/b; Brent also declined by 2.23% to $111.54/b; during September WTI rose by 0.11%; Brent fell by 4.24%.
The chart below shows the normalized prices (August 31st =100) of WTI and Brent during September.
On Today's Agenda:
Philly Fed Manufacturing Index: This report was likely one of the reports factors that affected traded to trade down the US stock markets and trade up gold and silver prices last month as the Philly Fed Manufacturing Index showed sharp drop in the index to -30.7 for August. The current expectations are a slight increase in the index;
Euro Area CPI: In July the annual inflation rate declined to 2.5%, a 0.2 percent point drop compared with June's inflation; the expectations in the upcoming CPI report for August 2011 are a slight decline. This news might affect the Euro currency, ECB's October rate decision and consequentially oil prices;
US CPI: This report will show the main changes in the CPI during August. In July 2011, the CPI inclined by 0.5% and over the last 12 months by 3.6%.
ECB conference Trichet speaks:following the recent rate decision in which ECB kept the rates unchanged at 1.5%, Trichet will give a speech regarding the economic stability of the Euro Area;
EIA Natural gas report: the EIA will publish its weekly report on the changes in the natural gas markets vis-à-vis the prices, production, demand, imports and supply. See here for the last natural gas report.
US Oil Stocksfell by 7.7 million bbl
The US Energy Information Administration published yesterday its weekly report on the U.S. petroleum market: according to the report, U.S.crude oil stockpiles fell by 7.7 million barrels. The oil production and imports also fell as it may be stemmed from the recent weather disruptions in the US.
S&P500 / Oil Prices – September
The S&P500 increased yesterday by 1.35%; in past three days the S&P500 gained back 2.98% to its value; during September, it declined by 2.48%. There is a strong positive correlation between oil prices and S&P500. If the US stock markets will continue their, it may reflect in oil prices rising.
Oil Price Outlook:
Oil prices are likely to follow pending the outcome in the Philly Fed Manufacturing Index that may affect traders. In the near future, I still think WTI will remain around $85-$90 mark and Brent around $110-$115, but during the remainder of September oil prices are likely to moderately decline.
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.
By: Lior Cohen, Energy Analyst for Trading NRG
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