The weak US payroll report from Friday, the budget deficit crisis in Hungary over the weekend and the resulting weakness of Euro kept prices under pressure in Asia in morning trade. Oil broke 70 dollars in Asia on Monday morning trading. New York’s main futures contract, light sweet crude, July delivery in July, fell 1.82 dollars to 69.69 dollars a barrel in morning trade.
Brent North Sea crude for July delivery shed 1.46 dollars to 70.63 dollars.
If the trend keeps up we should see 65 before Friday. Remember from the 6th – 8th both USO and OIL ETF’s rollover their future exposure to the next month in order to avoid taking delivery, which means that prices should remain weak for the next two days.
Alternatively if the Hurricane season in the Atlantic starts off with a bang this month, we are just as likely to see a reversal. The mid week inventory report by API and EIA should also help push prices up if they show a larger than anticipated decline in inventory and stockpile figures.