After close to three months in a range of $56 to $62 per barrel, WTI crude is tradingon Monday under $55. This week we will be watching to see if a downward breakthrough from this range will materialize. It should be noted that even if commodities were traded brieflyon Friday, there was no official close due to Independence Day in the United States.
- This recent drop in crude prices was spurred by Baker Hughes (NYSE:BHI)' announcement that the number of active drilling rigs in the U.S. had increased for the first time since December. However, the change was only from 859 to 862.
- Diplomats from Iran and the world's major powers were in negotiations to complete a potential agreement on Iran's nuclear program. The deadline recently set for an agreement is July 7. An agreement would confirm that Iran's nuclear program is solely civil in nature and lift economic sanctions, among other things.
- Sunday's results from the Greece's referendum are giving pressure on energy prices on Monday morning. An exit of this country from the Euro-zone makes the investors believe that this could be a source of a financial turmoil.
- The loonie recently lost some ground. For various reasons, it has fallen by close to 3% over the last two weeks. The end result is that the change in prices for fuel, paid for in Canadian dollars, has eroded our purchasing power. Our currency should also be watched closely over the next few weeks, since fuel prices in Canadian dollars could be impacted by another even larger depreciation.
Have a good week!
Philippe Shebib