Friday, 03 April 2015 18:06

Crude Oil Falls on Negative Manufacturing PMI Releases

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WTI down as German, France and China Manufacturing PMIs reported fall.

According to Markit report China Flash Manufacturing PMI fell to 48.3, lowest in last seven months while German and French Manufacturing PMIs fell to 54.7 and 48.5 respectively. Euro Flash manufacturing PMI also dropped to 53.0.

Today WTI gained to $103.50 on expectation of high inventory fall but retreated after PMI results. The commodity fell to $102.97 and loses by 0.51 %.

Crude oil is the main energy source used in manufacturing industry. U.S. and China are the first two largest consumers of oil. If manufacturing activities slows down at these two economies then it directly falls demand for crude oil.

Today at 1500 GMT U.S. Philly Fed Manufacturing data will be released. According to forecast the index may fall to 9.2 from 9.4 of last month. Fall in industrial production, factory orders and empire sate manufacturing index may bring negative result to this index.

Shrinking Inventory

Crude Oil prices reached at six months high on expectation of shrinking inventory. The commodity made the high of $103.80 yesterday, level seen last on 28th August,13.The commodity gained 5.16% in this month and in this year it provided return of 3.93%.

Energy Information Administration will release crude oil inventory data today at 1600 GMT. According to Bloomberg forecast distillates inventory is expected to fall by 2125k from previous fall of 731k. This will be the third consecutive fall in inventory. Comparatively inventory for crude oil will increase by 2050k. Market is expecting high fall also in inventory of Cushing Oklahoma crude.

Weather Forecast

According to National Weather Service report more mountain snow is expected at Inland Northwest with the snow accumulation of 4 to 10 inches. Low temperature at this region is expected to surge demand for heating fuels. Natural Gas inventory is likely to shrink by 261 billion cubic feet, 24Bcf more than last withdrawal.

In other energy commodities Natural Gas gained 0.24% to $6.163, Brent crude oil down by 0.43% to $109.98 and Gasoline is at $279.72 down by 0.97% at 0900 GMT.


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