A perfect example of how the release of news can impact futures is the decline that oil made on February 6, as information relating to U.S. reserves of the commodity and concerns related to future demand drove down prices.
The commodity dropped sharply amid the information, as March oil futures fell $1.34 per barrel to reach $95.30 in electronic trading on the New York Mercantile Exchange, according to The Associated Press. This price movement came after the contract rose 47 cents to reach $96.64 the day before.
Brent crude was trading 70 cents lower at $115.82 per barrel on the ICE Futures exchange in London, the media outlet reports.
One piece of information that was thought of by many market observers as being important was data supplied by the American Petroleum Institute, which revealed that U.S. stockpiles of crude rose to 3.6 million barrels during the week ending February 1, 2013.
"At present, U.S. crude stocks are at a 31-year high for this time of year," analysts at Germany-based financial services firm Commerzbank stated, the media outlet reports. "The price of WTI is suffering accordingly."
The Germany-based financial services firm predicted further appreciation in the commodity, stating that "any drop in prices is evidently being seen by market players as a chance to buy at present, suggesting further gains," according to the news source.
Platts projected that this amount would total 3 million barrels, and the figure suggests that the market for crude has substantial supplies, according to MarketWatch. A separate report from the Energy Information Administration was expected later in the day.
Role of dollar
One variable that could have easily impacted the contracts for oil was the value of the dollar relative to other currencies. The media outlet reports that the ICE dollar index rose to 79.811 from 79.504. The greenback made substantial gains relative to the 17-nation euro.
According to the news source, concerns surrounding Italy's current race for prime minister were credited by some with placing downward pressure on the common currency. Market participants are worried that former Italian Prime Minister Silvio Berlusconi is now more likely to win the current election, and this outcome could lower the odds that the changes initiated by Prime Minister Mario Monti will be completed.
Reuters reports that the concerns about political turmoil in Spain and Italy helped to dampen the boost to sentiment that was provided when Markit released strong data indicating that the euro zone is improving.
"Concerns over Europe appear to have eased, although problems in the region are still a long way from being resolved and fiscal austerity measures will continue to contribute to soft energy demand throughout 2013," National Australia Bank analysts stated in a report, according to the news source.
Global market participants also focused on the European Central Bank meeting scheduled for later in the week, and many market experts predicted that the financial institution would leave its interest rates unchanged at 0.75 percent, the media outlet reports. The ECB was expected to focus on the potential implications of the recent gains made by the euro, as the tepid recovery of troubled nations in the region could be undermined by a strong value for the common currency.
China economic data
Global traders of oil futures will also be perusing economic data released by China, as Asia's largest economy is expected to release strong figures for the nation's January exports, with market experts taking part in a recent Reuters poll predicting that these shipments to other nations increased at the fastest rate in 11 months during this period.
You can obtain free, quality futures trading education at TradingPub, which gives you the opportunity to interact with some of the top traders and investors in the industry.