Energy Commodities Price Watch: WTI Poised for Weekly Gain

on Jun 14, 2013

West Texas Intermediate (WTI) has increased today, June 14, boosted by signs of economic recovery in the US, and is on track for a weekly gain. The Brent price has also been on course for a marginal gain this week, boosted by continuing dollar weakness and supply concerns related to the escalation in the civil war in Syria. The natural gas price closed higher for a second day running yesterday.

**WTI Price Rises on Upbeat US Growth Prospects**
WTI for July delivery has gained 61 cents to $97.30 a barrel on the NYMEX and was seen trading at $97.09 as of 10:26 BST. The WTI price has found support in US government data indicating that retail sales in the world’s largest economy increased the most in three months in May and that the number of jobless claims dropped last week.

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“The US recovery has been consistent for a while now,” noted Guy Wolf, global head of market analytics at Marex Spectron, as quoted by Bloomberg. “It’s not booming, but it is sustained. Oil prices are reasonably well supported at these levels. However, markets have been wedded to stimulus for some time now.”
While the WTI price seems set for a 1.1 percent advance this week, analysts polled by Bloomberg expect prices to drop next week amid speculation that the US Federal Reserve might taper its bond-buying programme.

**Brent Price Supported by Weaker Dollar and Syria Tensions**
Brent crude has risen above the $105-level, to trade at $105.33 a barrel on the ICE Futures Europe exchange. The contract rebounded from a weekly low of $101.82 on Tuesday and is on track for a gain this week.
The European benchmark crude has found support in a weaker greenback. Ric Spooner, chief market analyst at CMC Markets, has commented that “the key driver of oil has been the weakness in the dollar rather than any fundamental factors”.

The oil price has also benefitted from concerns over escalating tension in Syria. Investors have been worried that even though the country is not crucial for global oil supply, escalation in the civil war could drag the whole oil-producing region into conflict.
“With the escalation in Syria, the buying on the dips is probably going to be stronger as the geopolitical premium needs to be increased,” Petromatrix analyst Olivier Jakob has commented, as quoted by Reuters.

**Natural Gas Price Rises**
!m[Brent Oil Price Advances on Weaker Dollar, Syria Concerns](/uploads/story/3091/thumbs/pic1_inline.jpg)
Natural gas futures closed higher yesterday for a second day running, up 3.7 cents at $3.814 per million British thermal units after having traded between $3.715 and $3.85. The advance was backed by technical buying and short covering following recent losses despite moderate weather forecasts for the eastern US, Reuters noted.
“I think the gains over the last two days have been mostly technical, a little oversold action, but there could be a little selling pressure ahead based on weather,” said Richard Hastings, macro strategist at Global Hunter Securities, as quoted by Reuters.
Today, natural gas for July delivery was 0.18 percent up at $3.88 per million British thermal units as of 07:45 ET on the NYMEX.


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