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Crude Oil Weekly Fundamental Analysis, November 23 – November 27, 2015 Forecast

By:
James Hyerczyk
Updated: Nov 21, 2015, 12:19 UTC

Analysis and Recommendations:  The energy complex finished mixed last week with January Crude Oil posting another lower close and January Unleaded

Crude Oil Weekly Fundamental Analysis, November 23 – November 27, 2015 Forecast

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Analysis and Recommendations:  The energy complex finished mixed last week with January Crude Oil posting another lower close and January Unleaded Gasoline finishing higher. For the week, crude oil was down $0.53, or 1.26%, ending at nearly a three-month low at $41.46. Unleaded gasoline closed at $1.2643, up $0.0324, or 2.63%. 

Crude oil started the week on a lower note, but managed to post a potentially bullish technical reversal bottom on talk that the escalating violence in Syria would eventually lead to a disruption in supply. By Tuesday, traders weren’t buying into that theory, and prices drifted sideways-to-lower the rest of the week. 

U.S. oil prices fell to nearly a three-month low as prices slipped below $40 a barrel on worries about a global supply glut. 

U.S. crude inventories grew by 252,000 barrels the week-ended November 13, according to data from the Energy Information Administration (EIA) that came in below a 2 million-barrel build forecast by analysts. For a brief time, the smaller-than-expected stockpiles growth convinced some traders and investors to cover short positions, helping prices to recover, but the move didn’t last and prices closed the week near their lows. 

According to the EIA, crude oil inventories stood at 487.3 million barrels, a little off the April record of 490.9 million. 

Prices aren’t likely to recover over the near-term because of resilient production during this low price environment. The premium, or spread between the nearby futures and the deferred contracts are nearly at seven-month highs, highlighting the better fundamentals for long-dated oil contracts. Traders have been pricing crude for future delivery at much higher rates, keeping millions of barrels in storage with the hope of making more money in later sales. 

Helping to underpin prices, but not significantly, was the weekly rig count report from Baker Hughes which showed a drop of 10 rigs this week. 

Total gasoline inventories increased by 1 million barrels last week, according to the EIA, and remain well above the upper limit of the five-year average range. Total motor gasoline supplied averaged over 9.2 million barrels a day for the past four weeks, up by 2% compared with the same period a year ago. 

Nonetheless, gasoline futures managed to finish the week higher, probably driven by expectations of increased seasonal demand over the Thanksgiving holiday week-end. 

Trading could be mixed this week. Volume and volatility are likely to be below-average because of the U.S. Thanksgiving holiday this week. Additionally, traders aren’t likely to move the markets too much, or change the trend ahead of the important OPEC meeting on December 4. There is a strong bias to the downside so any rallies should be attributed to short-covering and should be limited. 

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks. 

Weekly January Crude Oil
Weekly January Crude Oil

 

Weekly January Unleaded Gasoline
Weekly January Unleaded Gasoline

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.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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