Oil prices continue to decline as the Euro keeps on free falling. Today, the Canadian and American trade balance will be published along with July’s OPEC report.
Here’s a short analysis and outlook of the oil market for today, July 12th:
Oil prices – July 2011
On Monday, July 11th oil price (WTI) fell again for the second straight business day by 1.09% to $95.15/b; during July WTI nearly didn’t change and fell by only 0.16%.
Brent, also continued to fell by 0.82% to $116.82/b; nevertheless, during July Brent rose by 4.57%.
The chart below shows the changes of WTI and Brent during July, in which they are both normalized to 100=30 of June.
Premium of Brent over WTI
The premium of Brent over WTI continue to remain high as it reached on Monday July 11th $21.67/b – the widest gap during July; this gap rose by 32.05% during July, mainly because Brent rose while WTI nearly didn’t change.
OPEC monthly report
This report will show the main changes in the oil market during June. The most interesting thing in this report will be OPEC countries’ oil production during June. In the last OPEC meeting, members couldn’t reach an agreement about raising oil quotas; Saudi Arabia signaled it will raise its oil production in order to compensate for the drop in Libya’s oil production, despite the recent disagreement in the OPEC meeting. If this upcoming report will show an increase in production beyond seasonality, it may help cool down the oil market (see here the last review of OPEC’s June crude oil market report).
American and Canadian trade balance
Today, the American and Canadian trade balance reports will be published; if they will be positive and show a drop in deficit, it may further strengthen the Canadian dollar and US dollar compared to other currencies which may affect oil prices.
In the previous report about the American trade balance for April 2011, the goods deficit decreased and reached $58.1 billion; the service surplus rose to $14.4 billion; as a result, the goods and services deficit decreased by $3.1 billion to $43.7 billion
In the previous Canadian report regarding April 2011, Imports and exports fell during April: exports decreased by 1.9%, and imports declined by 0.6%; as a result, the trade deficit widen from $417 million in March to $924 million in April.
Oil price outlook and analysis:
Oil prices continue to trade down, probably due to the weakening of the Euro. There are also some concerns in regards to the demand for oil that may further pull oil prices down. If the economic indicators regarding US and Chinese economies will continue to show a slowdown, it may further reflect in oil prices throughout the day.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
Tentative –OPEC monthly report
13.30 –Canadian Trade balance
13.30 –American Trade balance
For further reading: Oil prices Monthly outlook –July 2011