It seems that the Greek default should be staved off again, at least until the next time. The Greek finance minister feels that an accord should be reached between Greece and the EU at tonight’s meeting that will keep the troubled nation solvent for now. That being said, the state of affairs in Greece, while having a knee jerk effect on the price of energies, really won’t have any lasting fundamental effect. Of greater concern is the inability for anyone to right the ship in Greece and whether or not that has systemic effects on the EU's sustainability as a whole.
Where energies are concerned, particularly crude oil, we can see why this scenario, while having very little effect on the direction or price discovery of crude, has had an effect on the relationship of WTI crude (United States product) and Brent Crude. Europe consumes mostly Brent crude so it would make sense that the Grecian situation would have the effect of pushing the spread between the two types of crude closer to parity as demand is questioned more for the more expensive Brent product. At about 3.50 cents, the spread between the two products is in the low end of the recent range. We can watch this spread for another possible indication of when we can break out of the tight range we have been mired in for months now. The direction of the spread, assuming the fundamental for the relationship remain the same, should indicate price direction (i.e. Brent appreciating to WTI should mean higher prices). Historically, the WTI was more valuable than the Brent yet that inverted in 2010 and eventually saw the high of Brent over WTI at a 28 dollar premium. The US becoming a major producer had the largest effect on that relationship. The next major event in the relationship could be the US expanding to become a major exporter, should legislation find its way through the US Congress.
The natural gas continues to trade sideways even with temperatures starting to show increases nationally. There is one week left for the July contract. It appears that some significant event will be needed to spark any real rally in the cheap fuel source. The commodity is stuck in the 2.75 area as the market awaits some fundamental development outside of seasonal attributes before showing any real signs of life.
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