Market Insights – July 6, 2015

July 7, 2015 • Posted in Market Insights

Market Insights – Week of July 6, 2015

 

  • Brent crude fell to just over $62/bbl last week with WTI at just over $57/bbl.  Prices fell more than 7% further on Monday
  • The US EIA reported a build in inventories for the first time in over two months
  • If Iran nuclear talks move forward next week and sanctions are lifted crude supply could increase again as Iran ramps up exports
  • The Wall Street Journal reported last week that domestic energy usage in Saudi Arabia for air conditioning and other uses is increasing so rapidly that the country may have to start importing oil by 2030
  • Greeks voted to reject the latest offer from its creditors, effectively defaulting on a $1.7 billion payment to the IMF. If negotiations are unsuccessful the default could lead to Greece’s exit from the Euro and cause serious financial disruption in European markets
  • The US dollar strengthened on news of the default, putting further downward pressure on plastics and other global commodities.  Global commodities are priced in US$ so a stronger US$ makes commodities more expensive which reduces demand and drives down prices

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