US crude has posted small losses on Tuesday, following gains on the Monday session. WTI Crude is trading at $49.29 in the North American session. Brent crude is trading just above the $50 level, at $50.03, for a premium of $0.72. On the release front, there are no economic releases for a second straight day. The markets will be listening closely to Federal Reserve Chair Janet Yellen, who will appear before the Senate Banking Committee and answer questions about the Fed’s Monetary Policy Report.
WTI Crude has posted small losses on Tuesday, as the Brexit referendum, only two days away, remains too close to call. Oil prices climbed on Monday, following two polls which showed the “In Camp” back in the lead, while a third poll pointed to renewed momentum for the “In” camp. Prime Minister David Cameron and prominent business leaders have warned that that a vote to leave the EU would hurt the UK economy, and a recent Treasury report says an EU exit will wipe out 800,000 jobs in the UK and cause a recession. The “Out” camp counters that EU over-regulation has stifled British businesses, and point to countries such as Switzerland that have close economic relations with the EU but are not part of the bloc. Still, leaving the comfort zone of the EU would be a journey into the unknown, and analysts predict that if the UK exits the EU, the pound could dive by as much as 10 percent.
With the Fed remaining on the sidelines at its June policy meeting, will we see any rate hikes this year? In the heady days of December when the Fed raised interest rates by a quarter-point, there was talk of up to four hikes in 2016. Fast forward to June, and the Fed hasn’t made a move so far this year. Many analysts are predicting only one hike in 2016, but on Friday, St. Louis Fed President James Bullard said that the economy may need just one hike in the next 2-1/2 years. Bullard did not mince words, bluntly stating that the Fed had done a poor job in its predictions about the US economy, and said the markets have no faith in the Fed’s “dot plot” of projected interest rate policy, as the Fed’s actual pace of rate hikes was much slower than its projections. Bullard added that this “mismatch” between words and action had caused distortions in the global financial markets and eroded credibility in the Federal Reserve.
Tuesday (June 21)
- 14:00 Federal Reserve Chair Janet Yellen Testifies
*Key events are in bold
*All release times are EDT
WTI/USD for Tuesday, June 21, 2016
WTI/USD June 21 at 11:30 EDT
Open: 49.85 Low: 48.83 High: 49.85 Close: 49.29
- WTI/USD has posted small losses in the Tuesday session.
- 46.49 is providing support
- There is weak resistance at 50.13
Further levels in both directions:
- Below: 46.49, 43.45, 39.32 and 35.25
- Above: 50.13, 53.50 and 56.79