Thursday, November 10, 2011

Today's Major Market Move: WTI Crude Futures Up 4.9% for the Week

The last time we discussed WTI Crude futures was back on Oct 26 after they had a nice 14% run up. In that post we cautioned "don't be surprised to see $100 or higher WTI crude prices in the near future". It's now a little over two weeks later and WTI is sitting on the threshold of triple digits at $99. Here's the top commodities gainers for the past week (with energy and PMs filling in the top 7 spots):

Click here to go to the live table.

Part of the reason for the run up has to do with the activity in Europe and the stimulative measures (ESFS exapansion, ECB bond purchases) being taken to deal with the sovereign debt crisis. There's also been a lot of chatter lately about Israel preparing for a strike on Iran. Both WTI and Brent have had nice recent gains but its interesting to see that the spread between the two has narrowed considerably.

Click here to go to the live chart.

Because the most recent crisis is centered in Europe, the expected slow down in economic activity and energy usage in that region could be tempering the move in Brent (Brent crude originates in Europe).

Going forward I expect to hear conflicting messages coming out of the ECB as they attempt to keep a lid on Italian bond yields while at the same time try to avoid a run up in oil prices.

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