Oil NEWS
Oil posts modest gains around $79.00 on US crude stock draw
Western Texas Intermediate, the US crude oil benchmark, is trading around $78.95 on Thursday. The black gold recovers losses after a surprise crude stock draw in the United States.
Latest Oil News
Oil Technical Overview
Fundamental Overview
Oil Big Picture
OIL BULLISH THEMES
OIL BEARISH THEMES
Latest Oil Analysis
Editors' picks
EUR/USD bounces from daily lows, returns to comfort zone around 1.0750
EUR/USD bounced amid broad US Dollar weakness following the release of US employment-related data. Initial Jobless Claims unexpectedly surged in the first week of May, undermining demand for the American currency.
GBP/USD battles 1.2500 post-BOE as USD turns south
GBP/USD fell towards 1.2440 as the Bank of England left monetary policy unchanged, pointing to delayed yet potentially steeper rate cuts. The pair bounced nicely in the American session as an improving mood undermines demand for the US Dollar.
USD/JPY Price Analysis: Could test 156.00 due to the hawkish bias
USD/JPY could test the psychological level of 156.00 followed by the upper boundary of the ascending channel. The bullish trend would be confirmed if the MACD line crosses over the signal line. The 14-day EMA at 154.89 appears as the immediate support.
Gold jumps towards $2,330 on sudden USD weakness
XAU/USD trades within familiar levels but turned north early in the US session amid a sudden USD decline, resulting from discouraging US employment-related data as Initial Jobless Claims unexpectedly increased in the week ended May 3. Easing T-yields add to Gold gains.
Oil posts modest gains around $79.00 on US crude stock draw
Western Texas Intermediate, the US crude oil benchmark, is trading around $78.95 on Thursday. The black gold recovers losses after a surprise crude stock draw in the United States.
Majors
Cryptocurrencies
EUR/NOK & USD/NOK
About Oil
Oil Highlights
Crude oil is classified into various grades according to density (heavy vs light) and sulphur content (sour vs sweet). The lighter and sweeter the crude, the higher the price it can be sold, because refiners can produce higher yield of high quality refined products from it.
Density is measured by API gravity, a measure developed to compare the density of petroleum with water (API > 10 means the liquid floats on water) but is now widely used to compare among crude oils. API degree is inversely related to the density of crude oil. In general, crudes of API between 40-45 degrees can be sold at greatest commercial values.
Sulphur content determines the quality of a crude oil. This corrosive material decreases the purity of a crude oil. Therefore, a crude oil with high sulphur content (sour crude) should sell cheaper than one with low sulphur content (sweet crude). There are two main benchmarks for pricing Crude Oil: WTI (West Texas Intermediate) from USA and Brent from UK.
Major benchmarks
West Texas Intermediate (WTI) crude oil is of very high quality. It has API gravity of 39.6 and sulphur content of 0.24% only. Its low density and low sulphur content gave it the name 'light, sweet crude' and enabled refiners to produce high yield of gasoline. Most WTI crude oil gets refined in the Midwest region of the country, with some more refined within the Gulf Coast region.
This type of crude oil is used as a benchmark in oil pricing and the underlying commodity of NYMEX's oil futures contracts. Due to its 'lightness' and 'sweetness', WTI crude is normally selling at about $1-$2/ barrel premium to Brent.
Brent is actually a blend of crude oil from 15 different oil fields the North Sea. It has API gravity of 38.3 degrees and sulphur content of around 0.37%. From these 2 parameters, we can see that Brent crude oil is heavier and less sweet than WTI crude. Brent is suitable for refinery of gasoline and middle distillates.
Brent was first traded on International Petroleum Exchange in London and then on Intercontinental Exchange (ICE) since 2005. Typically, price of Brent crude oil is around $1 lower than WTI. However, in 2007, due to the depletion of the North Sea Oil field, Brent Crude futures had traded at a premium to WTI of approximately $1 to $3 per barrel.
Oil and USD/CAD Correlation
Some of you may already be familiar with the special relationship between oil prices and the Canadian dollar. For those of you who aren't, let me fill you in on what you're missing!
There's a reason why Canadian dollar traders keep track of oil prices-- the two often move hand in hand. When oil prices move down, it's not uncommon to see the Loonie follow suit. Conversely, rising oil prices are usually accompanied by Loonie rallies. Why do these two share such a strong bond? It has a lot to do with Canada's economy.
Canada happens to be the world's seventh largest oil producer. In fact, it's the U.S.'s main supplier, as it sends about 2 million barrels of oil a day to its southern neighbor. Since Canadian dollars are needed to purchase and move oil across the border, the demand for oil tends to have a direct impact on USD/CAD price action.
It's interesting to see that aside from risk sentiment and fundamentals, oil also plays a big factor in Loonie price action. So the next time you think of trading USD/CAD, do yourself a big favor and take a peek at your oil charts. It could just give you critical insight to help you bag some Loonie pips!
Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF and NZD/USD.