After surging more than +4% Wednesday and +7% over the past 2 days, crude oil price retreats in European morning. However, momentum remains strong and the black gold should continue to trade above 70 in the near-term.
Deep correction in China stock market had put heavy downward pressure on worldwide equity markets and commodities over the past few days. Today, the +4.5% rebound in China shares (the Shanghai Composite index) helped lift both stocks and commodities.
China oil companies will be reporting second-quarter earnings result next week. Sinopec (0386.HK), the largest refiner in Asia, is expected to post a net profit of RMB 16B on 2Q09, representing +42% rise from 1Q09 and 7 times higher than the same period last year.
Sinopec probably recorded the strong increase in earnings from last year as it is most leveraged to refinery business among the 3 oil giants (Sinopec, Petrochina and CNOOC). The Chinese Government had raised ex-factory prices for oil products this year using a new pricing mechanism.
In the UK, retail sales increased +0.4% mom in July, compared with market expectation of +0.3%. On annual basis, the reading rose +3.3%, better than consensus of +2.8% and +2.9% in June. The FTSE 100 Index opens higher and rises +1.3% to 4749. Germany's DAX and France's CAC 40 also add +1.1% and +1.3% to 5290 and 3495 respectively.
Market's focus has turned to US' leading indicators and Philly Fed surveys. Economists anticipated leading indicators should have risen +0.6% in July following a +0.7% increase in the previous month. Philly Fed index probably improved to -3.3 in August after plunging sharply to -7.5 a month ago.
Natural gas price edges higher in tandem with others in the energy complex. Currently trading at 3.14, the benchmark contract remains struggling at the multi-year low level on oversupply issues. The US Energy Department will probably report that gas storage rose 50 bcf to3202 bcf in the week ended August 14.
Gold price continues to trade sideways while silver tries to regain the 14 level after the abrupt fall yesterday.