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Crude Oil and Natural Gas Futures Outlook

Crude Oil and Natural Gas Futures Outlook

Crude oil prices have risen early this week as concern grew regarding armed conflict and a potential political confrontation in Iraq, OPEC’s second-top oil exporter. At the same time natural gas prices dropped below the $4 mark as cooler weather was expected in the US.

Crude Oil and Natural Gas Futures Outlook

As Iraq continues to destabilise, the price of crude oil is rising while cool weather in the US has reduced the price of natural gas.

As Iraq’s PM Nouri Maliki said that he will take the country’s president, Fouad Massoum, to court over what Maliki called a “coup” oil prices were up on both the New York Mercantile Exchange and the London Exchange.

Natural gas for delivery in September was trading at $3.943 per million British thermal units in New York. Prices reached a three-week high of $4.012 per mBtu while the contract added 4.3% last week.

However, last week money managers cut natural gas net-long positions by 21% in the week through August 5th while Goldman Sachs reduced its Q4 natural gas outlook to $4 per mBtu from $4.25.

Tim Evans, an energy analyst at Citi Futures in New York said, “If you are a money manager and you see above-average storage injections week after week and a decline in price, selling is rational. There’s no massive heat wave consistently across the U.S. that is going to spike air-conditioning demand, and we continue to see production numbers that show robust growth.”

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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