Crude oil prices are falling in part because of comments from Saudi Araba and partly because they really have nothing much else to do. Saudi Arabia is pumping over 10 million barrels of oil a day and says that they will not cut production unless other producers do so as well. Saudi oil minister Ali al-Naimi seems to have suddenly found a new found respect for the free market and in a moment of clarity said, “We repeat that, as for prices, the market determines it! We refuse to take responsibility alone because (OPEC) produces 30% of market output and 70% comes from outside."
The market seems unconvinced that a deal with Iran will soon unleash more supplies of oil into an already over saturated marketplace so it will look to the dollar for movement inspiration. That may be hard to find as today the market gets little economic data to move us. The market is still thinking that last week’s statement by Fed Chair Janet Yellen that even though the fed dropped the word patient that that does not mean that they are going to be impatient.
Gas prices dipped after refinery glitch panic buying subsided. Retail gasoline prices fell 3.93¢ in the last two weeks according to the Lundberg Survey. That brings the average price for regular gasoline $2.4991 a gallon. Yet with more glitches at an Illinois refinery and a splice in high grade gas, my bet that this week may see the bottom in retail prices! Bring on summer and the summer blends.
Russia may have another economic problem to deal with, a bad grain harvest. Reuters reports that “Russia's 2015 grain crop may fall short of official forecasts by up to 100 million tons as the condition of winter grains in some key growing regions has deteriorated since last year, the managing director of a large Russian agricultural group said.”
Copper is still strong after hitting the highest level in 10 weeks. Expectations that China will spend some stimulus money on the red metal is giving us a boost.