|News||The EIA report|
|Previous||2.9 million barrels|
|Forecast||1.0 million barels|
|Analysis||Crude prices stabilized today above $86 per barrel supported by improving US jobs market, especially after the improvement the services sector showed in the past few days. We await the release of the EIA report today, where is it expected to show a rise in inventory levels from the largest consumer in the world.|
Yesterday's FOMC minutes reflected optimism regarding the economic recovery path in the US, which could support hiring and consumption in the economy and breaking the rigidity of lending processes. The feds were more dovish and warned of a rise in benchmark interest rates at the time being as it might harm the economic recovery; however, the feds think that its too early to be talking above raising the benchmark interest rate that has currently stabilized by 0.0 – 0.25% especially amid subdued inflationary developments.
The optimistic data from the feds support oil prices, where it managed to achieve its highest levels yesterday around $87.05 per barrel, it's highest since the October 9, 2008; and according crude so far this year is higher by 9.5%.
The EIA revised higher their price estimates for oil throughout 2010 to levels around $80.74 per barrel, compared to previous expectations of an average of $80.06. The estimate improvement following strong expectations of the recovery for the US throughout this year; these estimates are 31% above average range for crude prices last year, which was around $61.66 per barrel.
Crude opened yesterday around $86.70 recording its highest around $87.05 and lowest around $86.12 per barrel, where it managed to close around $86.80 per barrel.
The API report yesterday showed a drop in motor gasoline inventories by 2.96 million barrels last week to 220.0, at the same time where the report showed higher crude stockpiles by 1.07 million barrels last week to 353 MB. Meanwhile, expectations regarding the EIA report today is for crude inventories buildup by 1.0 million barrels compared to the previous week by 2.9 MB.
The S&P GSCI index closed yesterday around 547.19 after gaining by 0.64; whereas the RJ/CRB Commodity index plunged by 0.99 to close around 278.52.
In NYMEX as of 02:44 EST; heating futures were trading around $235.500 per gallon higher by $0.670; motor gasoline is trading around $226.590 per gallon after rising by $0.240; whereas natural gas also followed and gained by $0.042 to record $4.138 per 1000 cubic feet. In London, Brent climbed by $0.080 to record $86.230.
Meanwhile, crude opened today around $86.72 to record its highest around $86.97 and lowest around $86.55 per barrel, where it is currently trading around $86.70 per barrel.