Crude Oil is trading at 101.00 up by 9 cents this morning as traders’ sentiment changes. Brent Oil remains weaker at 107.60 down by 11 cents. Traders seemed to flow into stocks on Monday moving away from commodities and currencies. Traders were watching news out of Europe for signs its fragile recovery could be derailed after worries that Portugal’s largest listed bank, Banco Espirito Santo (LISBON:BES) was badly exposed to its owners’ accounting problems. Any new shocks could halt the eurozone’s economic recovery, spoil improving market sentiment and eventually tip the region into deflation, the International Monetary Fund warned on Monday.
Crude oil prices were mixed in Asia today as investors await Congressional testimony by the US central bank chief for fresh clues about the state of the world’s biggest economy, analysts said. US Federal Reserve chair Janet Yellen will begin two days of testimony later today before congressional committees that will focus on the bank’s time-frame for raising the benchmark interest rates.
French lender Credit Agricole said Yellen is likely to say that the Fed’s key policy-making committee “looks for the rate lift-off in 2015’’. However, she will “emphasize that Fed views on the timing of the lift-off remain contingent on the economic outlook”, the bank said in a market commentary.
Oil prices remain supported following turmoil in Libya, which has clouded expectations of a return of the country’s long-disrupted crude supplies to the market.
Libya had suspended all flights to and from its third city, Misrata, a day after deadly clashes closed the country’s main international airport in Tripoli and damaged several planes. Libya’s interim Prime Minister, Abdullah Al-Thani had declared earlier this month that authorities had regained control of two export terminals — Ras Lanuf and Al-Sidra — blockaded by rebels demanding autonomy in the country’s eastern region. Crude futures had fallen heavily last week, stoked by the prospect that the ports could add about 500,000 barrels of crude per day to global energy markets. The North African state’s output currently stands at about 320,000 barrels per day, about a fifth of its normal output.
Lacking any catalysts, the price of oil barely changed Monday. Meanwhile, gasoline prices in the U.S. slipped to three-month lows. The average price for a gallon of gasoline in the U.S. is $3.61 a gallon, the lowest since April 10, according to AAA. Gas is about 4 cents cheaper than a week ago, but drivers are still paying around a penny more than at this time last year.
Gas prices typically slip as summer progresses, but they stayed higher longer this year because of violence in Iraq that raised concerns over disruptions to oil supplies there. Now that those supply concerns have ebbed and U.S. production is booming, gas prices are set to slide sharply in the weeks to come, said specialists at travel club AAA and GasBuddy.com.