WTI oil futures end a mixed trading week at $97 a barrel as US oil prices once again take a cue from the economic situation in America as US consumer confidence plummeted, the US dollar remained mixed and US debt talks continue.
WTI Oil Futures – Closing Price
US Light crude oil futures for August 2011 delivery ended the week’s trading session at $97.24 a barrel on the NYMEX, which was still $1.04 higher than last week’s closing price of $96.20.
US Credit Downgrade?
The US dollar dropped this week against 10 of its 16 major currency pairs after Moody’s put America under review for a credit downgrade and S&P put the US on Creditwatch negative, meaning there’s a one in two chance they may be cut in the next 90 days.
Meanwhile, Confidence among US consumers unexpectedly fell in July to the lowest level in more than two years, adding to concern that weak employment gains and falling home prices may keep households from spending.
A preliminary index of consumer sentiment decreased to 63.8, the weakest reading since March 2009, from 71.5 the prior month. Lower consumer confidence may dent oil demand from the US in the short to medium term.
Also, on Thursday, US Fed Chairman Ben Bernanke said the US central bank was not ready to launch new any new stimulus and was still monitoring the US economic prospect.
Oil Price Short Covering
“There is pre-weekend short covering going on as nobody wants to be short at this time with so many things going on.” said Phil Flynn, analyst with PFBEST, Chicago.
Oil Price Forecast
Thirteen of 30 analysts surveyed by news company Bloomberg, or 43 percent, forecast oil will rise through to 22nd July. Eleven respondents, or 37 percent, predicted that oil prices will fall and six estimated there will be little change. Last week, 51 percent of those surveyed said oil price would drop.