After rising for eight consecutive weeks, a barrel of oil, quoted in U.S. dollars, is starting the week on the downside. The price of gold depreciated of more than 2.5% since Monday.
- Weekly data released last Wednesday showed that U.S. crude stocks had fallen for a second consecutive week. The Department of Energy (DOE) announced that crude oil stocks were down 2.1 million barrels in the U.S. and had fallen 990,000 barrels at Cushing, Oklahoma.
- Commerzbank (XETRA:CBKG), a German bank, attributes the recent rise in energy prices to massive speculative positions. The bank nevertheless fears that a correction is coming, since OPEC's output for April was over 31 million barrels/day. It should be recalled that the oil cartel's official quotas still total 30 million barrels/day. OPEC will be meeting in Vienna on June 5, 2015 to discuss the subject.
- Last week we also learned that Goldman Sachs (NYSE:GS) expects a correction in oil prices. According to Jeffrey Currie, its head commodities analyst, the energy industry's fundamentals do not justify prices this high. He said that excessively high gasoline inventories will erode refining margins, and the cutback in U.S. drilling operations will be insufficient for a sustained drop in U.S. production.
- Since some banks have posted negative outlooks for the energy market, we may be moving toward a slight decline in prices. This may be the right time for you to leave orders at lower levels and lock in a portion of your fuel spending for next year.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.
Have a good week!
Philippe Shebib