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Thursday, May 31, 2012

Crude oil prices prediction june 1 2012

Crude oil prices prediction june 1 2012, Brent crude fell towards $101 a barrel on Friday, kicking off June in the red after posting its worst month since 2008 in May, after data showed manufacturing activity in No. 2 oil user China dropped more than forecast.

China's official Purchasing Managers' Index eased to 50.4 in May, the weakest reading this year, underscoring output in the world's second biggest economy was slowing. Economists had expected the index to slip to 52.2 from a 13-month high of 53.3 in April.

This is another source of selling for oil markets, on top of China not showing much interest in stimulus China's top policy advisers said on Wednesday the country does not need massive fiscal stimulus since aggressive spending now could do longer-term harm.

London front-month Brent crude fell 41 cents to $101.46 per barrel by 0131 GMT. Brent hit a session low of $101.27 on Thursday, its weakest since October and fell 14.7 percent in May.

U.S. oil slipped 38 cents to $86.15 a barrel, after losing more than 17 percent last month.

The Chinese data comes ahead of the U.S government's closely watched employment report for May on Friday, which is expected to show nonfarm payrolls increased 150,000, up from a paltry 115,000 in April.

I don't think Friday's numbers are going to be any better. It's been a dismal week so far, and we haven't hit bottom, We're going to see more downside pressure on prices, with Brent likely to drop below $100 and WTI expected to dip further to around $83."

Any flicker of hope of a recovery gathering traction in the U.S. economy was snuffed out on Thursday as private payroll growth in the United States barely picked up in May with claims for jobless benefits seen rising.

Brent's premium against U.S. crude CL-LCO1=R was at $15.31, after hitting a high near $16 in the previous session, before narrowing after U.S. government data showed that crude oil stockpiles at Cushing Oklahoma, while reaching a new record, edged up only modestly from the previous week's levels.

U.S. crude oil inventories, excluding strategic reserves, rose much more than expected last week to hit their highest level since July 1990, U.S. Energy Information Administration (EIA) date showed.

EURO ZONE CRISIS

Oil prices also came under pressure as worries mounted about the euro zone debt crisis after International Monetary Fund Managing Director Christine Lagarde denied a report that the IMF was considering contingency plans for a Spanish bailout.

The debt crisis has escalated in recent weeks on prospects of a messy Greek exit from the euro zone and worries over Spain's rising borrowing costs. This has dented the demand outlook for commodities and dragged prices down.

"The markets are really spooked by the euro zone debt concerns, and it's not just Greece and Spain. By the end of next week we could possibly be talking about Portugal, It's tough to see any immediate solution because the process in Europe is much more complicated because of the politics involved."
The euro hit a two-year low and was seen at risk of falling further in coming weeks, dogged by worries about Spain.

After the publication of the report on amount of oil in US inventories from U.S. Department of Energy the Crude oil futures fell increasing their previous day’s losses. As it was reported, the stockpiles of Crude oil rose for the week of May 25 by 2.2 million to $ 384.7 million thus showing the 10th consecutive weekly increase. This amount was equal to a 22- year high. Also the Oil fell on speculation that the debt crisis in Europe will slow down the U.S. economic growth and therefore reduce demand for fuel. The cost of the July WTI futures fell to $ 85.84 per barrel on the NYMEX today.

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