Weekly Market Report
Friday, January 11th 2013
Petroleum prices have surged higher to start the year as the fiscal cliff deal worked in tandem with a cut in production by Saudi Arabia. The spike from $85 per barrel in early December to over $93 is renewing pressure on consumers at the pump after a brief reprieve late last year. Key factors impacting the market include a series of strong economic reports out of China, a million barrel production cut by Saudi Arabia, and the growing concern that a showdown with Iran over its developing nuclear program is on the horizon.
Fortunately for drivers, few industry experts expect the upward pricing pressure to continue. Steadily rising domestic production in the United States coupled with sluggish global economic growth should act as a headwind for traders in the first quarter of 2013.
Tuesday, September 4th
Oil prices slid by more than 1% today and were down $1.22 to $95.25 in midday trading. Fresh economic concerns following a weak U.S. manufacturing report appears to be the driving force behind the sharp sell-off. In addition to the signs of a slowing economy, production activity in the Gulf of Mexico is back in full swing in the wake of Hurricane Isaac.
Friday, July 20th
Brent crude slid $0.97 to finish the day at $106.83 in London while benchmark oil slipped $1.22 in the New York session to close the week at $91.44 per barrel. Traders sold off futures contracts for the first time after seven straight days of advances. Tension between the United States and Iran helped push prices up nearly 10% for the week.
Tuesday, January 10th (2012)
Traders continued to push crude futures higher on Tuesday as uncertainty over Iran’s threat to close the Strait of Hormuz continued to support prices. On the New York Mercantile Exchange, oil futures closed up $.84 per barrel to settle at $102.15 after trading as high as $103.39 early in the session. Commodities showed strength across the board as gold and silver extended their recent rally. The major equity indexes also posted gains today with the Dow Jones Industrial Average gaining 69.78 points while the Nasdaq added 25.94 to finish the day at 2702.50.
Wednesday, December 7th
Ahead of the highly anticipated European Union summit, stocked edged higher while crude oil futures traded lower by $0.73 per barrel to close at $100.55. Recently released data showing that U.S. supplies rose by over 1 million barrels last week were to blame for today’s selling pressure. Expect considerable volatility over the next several trading sessions as rumors continue to swirl over the possibility of a second European bailout fund. Any perceived setbacks could quickly send commodities traders to the exits as optimism has been the primary force supporting worldwide markets in recent weeks.
Wednesday, November 30th
The price of crude oil jumped back above $100 per barrel today after central banks agreed to offer low-rate dollar loans to struggling banks to prevent a deepening global credit crunch from spreading. The news sent stocks soaring and put pressure on the U.S. dollar in the currency market. This helped to push commodities higher across the board. The Dow Jones Industrial Average posted its best daily gain in nearly three years ending the day up 490 points to close at 12,045.68.
Friday, November 4th
Crude pushed slightly higher as equity markets saw a wave of selling. Oil finished the day up $.35 to $94.42 per barrel as rising demand coupled with tighter supplies kept a steady bid on crude. A slow but steady stream of improving economic data in the United States has helped to support a month-long rally. Meanwhile, the Dow Jones Industrial Average slid 61 points to close at 11,983 and the S&P 500 slipped nearly 8 points to 1,253.
Friday, October 28th
The price of petroleum slipped slightly lower on Friday after posting big gains in Thursday’s trading session. Futures settled at $93.32 per barrel ahead of the weekend after moving up from $75 per barrel just 3 weeks ago. Despite predictions of falling energy demand in the wake of proposed European spending cuts, traders are getting a confidence boost from a gradually improving economic picture in the United States. This week’s better-than-expected GDP number sparked a sharp rally in commodity prices, including oil. Stocks also finished higher for the week with the Dow Jones Industrial Average posting the largest one-month gain since 1974. The European debt deal announced earlier this week helped to remove stubborn selling pressure that has held equity prices down and kept pressure on crude oil.
The market managed to overcome some resistance that had been in place since the middle of the summer as prices reached their highest levels since August. While trading this week was decidedly bullish, energy issues may face some headwinds in the coming weeks as Libya resumes production after a lengthy stoppage.
From a technical standpoint, crude is approaching the 200-day moving average at $95 per barrel and is likely to consolidate or pull back slightly before retesting the highs put in place earlier this year. The recent rally is starting to look extended at current levels and traders looking for an entry point for a long position may want to wait for a close above the 200-day moving average before placing a new trade.
Rising prices are already beginning to impact consumers as average gasoline prices edged up to $3.44 per gallon. According to AAA, that represents an increase of over $.60 a gallon from this same time last year. Some analysts have expressed concern that rising energy costs could be a drag on an already fragile economic recovery. Ultimately, a slow economic recovery combined with new supply entering the market from Libya should contain any further move to the upside in the short-term.
Look for several pieces of economic news to impact the market next week including crude inventories and non-farm payrolls. Commodities are likely to see more volatility heading into November as breaking news continues as the primary driving force behind futures trading activity.