Daily outlook for crude oil prices

Quotes from Commerzbank Corporates & Markets:

-Oil prices shed 2% yesterday and remain under selling pressure this morning. Brent is trading only just above $58 per barrel and is thus nearing last Thursday's low. WTI has already fallen below this level and is trading at a two-week low of less than $49 per barrel. The price differential between the two oil types exceeded $10 per barrel for a time yesterday, its highest level in nearly a year.

-The expectation of further rising US crude oil stocks is pressuring prices. According to a Reuters survey, stocks are supposed to have climbed by an additional 4 million barrels last week, partly as a result of the refinery strike in the US that has been underway for three weeks now. The partial return of supply from Libya is weighing on the Brent price despite its sustainability being anything but certain.

-Prices of middle distillates and US natural gas have fared noticeably better than crude oil of late. This is probably due in part to the aforementioned strike at US refineries, which means that fewer oil products are being produced. What is more, the US Northeast is experiencing a cold snap which is causing heating demand to soar.

-Despite falling oil prices, US heating oil yesterday climbed to a three-month high of 224 US cents per gallon, while US natural gas reached a good $3 per mmBtu, its highest price in a month. Gasoil also profited ultimately from this and has been able to resist the weak Brent price. We regard this relative price strength as merely temporary.