NEWS & EVENTS: Breaking News
23.06.2009 09:48
June 23. In global petroleum market news, oil steepened losses below USD 67 a barrel on Tuesday, after a fall of nearly 4% the previous day, as renewed worries over the uncertain outlook for major economies sparked a sell-off across global equity markets. The market awaits US weekly inventory data from the American Petroleum Institute due later and US government figures on Wednesday, for clues on the demand outlook for the world's top energy consumer. The data is expected to be mixed, with lower crude inventories but rising product stocks. Investors were also cautious ahead of a two-day US Federal Reserve policy meeting on interest rates US light, sweet crude for July delivery expired on Monday, settling down USD 2.62 at USD 66.93 a barrel, while London Brent crude fell 98 cents to USD 66. Right now the price of oil is falling again in line with the stock market. The outlook on the production side is quite clear, but the demand side of the market is still being questioned. Optimism over the prospects of economic recovery have already been factored into equity and commodity markets, so now traders are standing back and reassessing. Monday's losses came after the World Bank said prospects for the global economy remain unusually uncertain as as it cut 2009 growth forecasts for most economies, adding to concerns of a slower turnaround. Meanwhile, US equities suffered their worst one-day loss in two months, throwing the the S&P 500 back into negative territory for the year on Monday, as investors reconsidered the health of the economy. Following Wall Street's rout, Japan's Nikkei average fell over 3% on Tuesday. Crude was also hurt by the firming US dollar, which gained against the euro and most other major currencies after Wall Street's sell-off. Moving forward, the next market mover will be the mid-week inventory report which is due out tomorrow. We believe that crude stocks fell by 2 mn barrels last weeks due to lower imports, while we expect gasoline stocks and distillates, including heating oil and diesel fuel, to go up. The API will release its weekly stockpile data today at 2030 GMT, while the US Energy Information Administration will release its report on Wednesday at 6.30 MSK. We think oil will probably track sideways -- probably between USD 65 and USD 70 -- over the next week.
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