Oil rallies with risk-on rebound

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gvIn honor of Brian Wilson’s 74th birthday, the oil market is picking up some good vibrations to start the week. As Brexit fears abate and risk-on returns, crude is propelled higher by a weaker dollar. Hark, here are five things to consider in energy markets today.

1) On the economic data front, German producer prices came in better than expected for last month (at +0.4%), but are still down 2.7% year-on-year (aka, deflationary terrain). Meanwhile, Japan kicked things off overnight with its first trade deficit in four months due to sluggish exports in the face of a rising yen. Imports also plunged, down 13.8% YoY, as (lest we forget, all paths lead back to energy) the value of crude imports tanked 30.8%.

Japanese LNG2) As the graphic to the right illustrates, Japan has historically paid much higher prices for imported natural gas, but is gaining some clout amid a saturated global market. Given the lack of natural resources, Japan has been at a disadvantage for many years when it comes to prices paid for imported fuels, but the current environment presents an opportunity for change.

Japan accounts for