Crude Oil Weekly Fundamental Analysis May 28 – June 1, 2012, Forecast

Get Forex buy/sell signals directly to your email and by SMS.
To learn more click here

Introduction:  Crude Oil is considered the king of the commodities markets.

The Strategic Petroleum Reserve is the United States’ emergency oil stockpile, and it is the largest emergency petroleum supply in the world. The reserve stores about 570 million barrels of crude oil in underground salt caverns at four sites along the Gulf of Mexico. Any dipping into this reserve is going to be big news.

Brent Crude is traded in London as something called Futures contracts, which are priced in US Dollars. Now, all you traders brave enough to run your positions over a period of days or weeks, pay attention

Most commonly traded is the NYMEX where you find West Texas Crude. It is also traded in USD.

Weekly Analysis and Recommendation:

Crude Oil  ended the week at 90.75

This was a very interesting week for the black gold, as negotiations between the world powers and Iran seemed to actually be making headway, as Iran set a proposal on the table and the sides extended the meeting for an additional day and set a future meeting. Signs are that Iran, will not cease enriching uranium, but they will allow inspections of the facility and will on their own accord decide it they should cease production. With the geopolitical situation well in hand, and production remaining high and growth estimates falling as the OECD stated this week, the demand for crude is tumbling along with prices. This weeks EIA inventory exceeded forecasts and put supplies at a 22 year high. Oil has been steadily dropping for two weeks now. This week it is trading close to the low, as shown on the below chart.

Highest: 93.34

Lowest: 89.31

Difference: 4.03

Average: 91.32

Change %: -2.65

There are more concerns to stay wary than to cheer. We can sense a pause in the commodity super cycle with slowing China, which is a huge importer of commodities, Euro zone crisis amid U.S. recovery is still uncertain. If politicians fail to provide much needed support market will get jittery and people will either sit on cash or look for safe haven buying. Dollar rally is narrating the same story. If dollar continues to rally than commodities may not see upside in the prices. A strong dollar generally drags on commodities priced in the currency. If we get some good economic numbers it may add some cheers in the market, like it happened last week when home sales data was better than expected and metals rose. Economic releases which can move the commodities prices in a significant way are CPI and unemployment change data of Germany, GDP of Switzerland, US and Canada, change in Non-farm Payrolls, unemployment rate, personal consumption expenditure core and ISM manufacturing of US.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Historical:

High:     114.57 

Low:      74.99

 

WEEKLY

  • This Week in Petroleum
    Release Schedule: Wednesday @ 1:00 p.m. EST (schedule)
  • Gasoline and Diesel Fuel Update
    Release Schedule: Monday between 4:00 and 5:00 p.m. EST (schedule)
  • Weekly Petroleum Status Report
    Release Schedule: The wpsrsummary.pdf, overview.pdf, and Tables 1-14 in CSV and XLS formats, are released to the Web site after 10:30 a.m. (Eastern Time) on Wednesday. All other PDF and HTML files are released to the Web site after 1:00 p.m. (Eastern Time) on Wednesday. Appendix D is produced during the winter heating season, which extends from October through March of each year. For some weeks which include holidays, releases are delayed by one day. (schedule)

 

Economic Highlights of the coming week that affect the AUD, JPY, NZD and USD

Date

Time

Currency

 

Previous

May 28

23:30

JPY

Household Spending y/y

3.4%

23:50

JPY

Retail Sales y/y

10.3%

May 29

TBD

AUD

HIA New Home Sales m/m

-9.4%

13:00

USD

S&P/CS Composite-20 HPI y/y

-3.5%

14:00

USD

CB Consumer Confidence

69.2

22:45

NZD

Building Consents m/m

19.8%

May 30

1:30

AUD

Retail Sales m/m

0.9%

1:30

AUD

Construction Work Done q/q

-4.6%

14:00

USD

Pending Home Sales m/m

4.1%

23:50

JPY

Prelim Industrial Production m/m

1.3%

May 31

1:00

NZD

NBNZ Business Confidence

35.8

1:30

AUD

Building Approvals m/m

7.4%

1:30

AUD

Private Capital Expenditure q/q

-0.3%

1:30

AUD

Private Sector Credit m/m

0.4%

1:30

JPY

Average Cash Earnings y/y

1.3%

12:15

USD

ADP Non-Farm Employment Change

119K

12:30

USD

Prelim GDP q/q

2.2%

12:30

USD

Unemployment Claims

370K

13:45

USD

Chicago PMI

56.2

15:00

USD

Crude Oil Inventories

0.9M

23:50

JPY

Capital Spending q/y

7.6%

Jun 1

12:30

USD

Non-Farm Employment Change

115K

12:30

USD

Unemployment Rate

8.1%

12:30

USD

Core PCE Price Index m/m

0.2%

12:30

USD

Personal Spending m/m

0.3%

14:00

USD

ISM Manufacturing PMI

54.8

 

Want to read more articles like this one?
Enter your e-mail address and read FX Empire content directly from your inbox.
 
We value your privacy. Your e-mail address will not be shared.
About:FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

  View all of FX Empire Analyst - Barry Norman's Articles    
Share Your Thoughts: Post a Comment


Your email address will not be published.