NewsOil prices drop slightly this morningPreviousForecastAnalysisOil fell below the $76 threshold for the first time since the start of the week after China reported surging inflation that surpassed preferred levels, raising a question mark relative to the global economic recovery on fear of further monetary tightening from the driver for global recovery.
The Chinese PPI had risen by 7.1% last month, while the CPI had ascended by 3.1% and Industrial production growth declined to 16.5% which is below expectations.
We await Consumer Confidence data from the U.S. for June today, as anticipations point to a rise, while retail sales are expected with a modest gain and a huge slowdown from the previous month; the conflicting data will extend the volatility today especially at the end of the week's trading.
Oil surged to a three week peak above $76 yesterday, hauled by the weakened dollar. This pushed investors into purchasing high risk and return assets, especially after ECB president Jean-Claude Trichet announced that the bond purchase program is temporary and proclaimed growth in the EU as moderate.
Crude prices were also supported by IEA's report on global oil demand this year, as the agency added 1.7 million barrels to it's prior estimate totaling 86.4 million barrels daily. The agency assured that the U.S. economic growth will lever oil prices further.
Oil futures due July opened at $73.80 yesterday, before recording a high of $76.25 and falling to a low of $73.70 and closing at $75.42.
S&P GSCI added 6.27 points in evening trading and closed at 495.11, while RJ/CRB closed at 255.08 after acquiring an extra 2.02 points.
At exactly 02:43 EST motor gasoline futures in NYMEX have risen by $0.320 to $207.370, while heating oil ascended by $0.020 to a current $203.300 per gallon and Natural Gas has inclined $0.041 and reached $4.688 per 1000 cubic feet. In London, Brent has fallen by 0.170 points to 75.12.