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Market Briefing
Thorbjoern Bak Jensen, A/S Global Risk Management Ltd.
30 Jul 2010 08:35 GMT
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|  Trends
Rotterdam (ARA) fuel oil - US$1 higher
Singapore fuel oil - US$7 higher
US Gulf - US$1 lower
Technical triggers dominate the day
After hitting an intra-day low of $75.6/barrel, Brent jumped close to 2% as US jobless claims figures came out better-than-expected. Gains were capped at $78/barrel one more time when technical sell signals initiated profit-taking. Today will be the fourth consecutive weekly close within the narrow trading band if prices stay between $75 - $78/barrel.
US Q2 GDP is expected to match Q1
Economists are predicting a 2.6% GDP growth in the second quarter versus a realized growth of 2.7% in Q1. Oil prices are closely tied to US GDP growth and a positive/negative surprise might be the fundamental trigger needed to move prices out of the narrow $75-$78/barrel range.
FED officials disagree on stimulus - Reuters
FED's regional branch chiefs clash on stimulus strategies in order to overcome softening economic recovery and uncertain inflation/deflation risks. Further quantitative easing, which was not ruled out by Bernanke, will support oil prices due to inflationary concerns and increased government spending.
Today's important numbers include German retail sales, Eurozone inflation numbers, US ISM NY index / Chicago PMI / UMich inflation and business sentiment figures.
Recommendation
We expect tame US inflation and in-line ISM figures. Focus will be on Q2 GDP outcome. We recommend monitoring the market for breaks above/below $75-$78/barrel and take positions accordingly. |
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