With confirmation of Greece remaining a part in the 17-nation Euro Zone, sentiments across the globe have improved and the week has begun on a positive note. But the Group of Eight (G8) leaders continue to stress that Greece needs to keep a close check on its financial commitments. Although long-term concerns remain intact, the news of Greece remaining a part of the Euro Zone has come in as a relief.
The G8 leaders stressed on the fact that while global economic recovery is showing signs of improvement, risks persist. Global policymakers look forward to focused steps and measures towards the European crisis and this hope if expected to be a positive sentiment booster in the near-term.
The last week saw sharp gains in the US Dollar Index (DX) as global financial markets continued to struggle with the ongoing economic woes. Demand for the DX was boosted as investors moved away from higher-yielding and riskier investment assets such as equities and commodities. The currency has stabilized above the 81-level in the past week and this strength is expected to continue in the near term.
During early Asian session, oil futures prices are trading above $91.80/bbl with gain of more than 0.60 percent in Globex electronic platform. Oil prices have rebounded from its weekly low as Iran oil minister said prices will certainly increase if the European Union moves ahead with the oil embargo in July. In the G8 Summit, leaders also addressed the possibility of oil shortage when new sanction against Iran’s oil export takes effect next month.
On the other side, US president Barak Obama says the leaders of world’s biggest economies are beginning to agree that more jobs and more growth will help to reverse European crisis. Optimism of Greece to stay in Euro area have supported Euro to bounce back and currently up by 0.15 percent at 1.2794 levels. Most of the Asian equities are also trading on higher side, which may continue to support oil futures to remain on positive trend. From the weekend, Seaway pipeline have started to deliver crude oil from Cushing to Gulf refineries in order to reduce the glut of inventory level. So, fall in stock level is also likely to support oil prices to take positive cues. Overall, we may expect oil futures prices to remain on positive side throughout the day.
Currently, gas futures prices are trading below $2.725/mmbtu with fall of more than 0.60 percent in Globex electronic platform. As per US weather channel, weather condition in most of cities in US is expected to remain warmer than normal temperature which may pull demand from a/c units. However, higher storage level reported in the last week, may limit the gains.