The Crude oil price has risen marginally as it continues to benefit from buoyant Equity markets. On London’s Intercontinental Exchange (ICE) front month crude futures rose around one quarter of a percent to trade at $71.05. The oil market has generally been supported by a combination of strong equity markets, a weaker dollar and an unexpected drop in initial stockpile data.
Speculation over the US Dollar’s position as the global reserve currency stepped up another gear on Tuesday.
Following press reports that some finance ministers were in discussion exploring the possibility of creating an alternative pricing currency for oil trading. The US Dollar is clearly under the microscope, however at such an early stage many feel as though the line between political posturing and actual intent will remain blurred for some time.
On a more fundamental note, investors will now look to the relative strength of American consumption as the weekly Department of Energy report comes into focus. As always the mid-week inventory data out of America will be key highlight in the crude oil market.
In the week’s initial inventory report from the American Petroleum Institute last night, distillate inventories fell by almost 3m barrels, against analyst expectations who anticipated a marginal rise. The principle inventory report from the U.S. Energy Department will release supply figures later today.
Several reports and analyst surveys suggest that the oil market is anticipating an increase in both Crude and Distillate stockpiles in this week’s report. Investors may look to the inventory data as an indication of crudes direction following a fairly strong start to the week, which has seen crude oil move towards the top of its range.
In London Oil & Gas FTSE constituents Tullow Oil (LSE: TLW) slipped nearly 2.5%, while British Petroleum (LSE: BP) and Cairn Energy (LSE: CNE) fell almost 2%. Royal Dutch Shell (LSE: RDSB) was also under pressure sliding 1% as Petrofac (LSE: PFC) eased marginally, losing three quarters of a percent.
The FTSE 350’s major Oil & Gas producers also had a mixed day. Heritage Oil & Gas (LSE: HOIL) was among the strongest Oil & Gas stocks, advancing 1.5% against the general trend in the sector. JKX Oil & Gas (LSE: JKX) gained marginally rising ½%. Dana Petroleum (LSE: DNX) and Premier Oil (LSE: PMO) both lost around 2% each.
Central and Eastern European operating explorer Matra Petroleum (AIM: MTA) extended recent gains, rising a further 2.5% this morning.
Mediterranean Oil & Gas (AIM: MOG) rose a further 3% to extend yesterday’s run. Fellow European focused oil junior Northern Petroleum (AIM: NOP) gained over 1% this morning.
Iraq and Algeria operating oil and gas junior Gulf Keystone Petroleum (AIM: GKP) eased 1% this morning.
North American based explorer Nighthawk Energy (AIM: HAWK) and Ukraine focused gas developer Regal Petroleum (AIM: RPT) both started the day positively each rising 1%.