Crude Oil Weekly Fundamental Analysis September 10-14, 2012, Forecast

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  closed the week close to its opening, at 96.34 having opened this past Monday at 96.16. The commodity was unable to take advantage of the ECB program and the likelihood of FOMC stimulus, as the prices were already trading at highs, which have attracted the Obama administration and the possibility of the release of the Strategic Reserves.

Oil prices rose on Friday in volatile trading after a disappointing U.S. August jobs report weakened the dollar and bolstered expectations for stimulus from the U.S. Federal Reserve, even while denting the outlook for petroleum demand.

Brent and U.S. crude futures posted small weekly losses, after five straight weekly gains and a surge of more than 9 percent in August.

U.S. nonfarm payrolls increased by only 96,000 new positions, the Labor Department said on Friday, below the forecasted rise of 125,000. While the unemployment rate dropped to 8.1 percent from 8.3 percent in July, it was largely due to Americans giving up the search for employment.

Oil prices received a lift from expectations that the jobs report increases the likelihood that the U.S. Federal Reserve’s two-day policy meeting next week will result in a third round of monetary stimulus, known as quantitative easing or QE3.

The possibility that strategic oil reserves may be released by the United States and other major oil consumer governments hemmed in oil prices, after U.S. government officials met oil market experts on Thursday as the White House considers the merits of another release.

While oil companies work to restore energy operations on the U.S. Gulf Coast after Hurricane Isaac, the government’s report on Wednesday showed domestic crude oil stockpiles, excluding the SPR, fell 7.43 million barrels in the week to Aug. 31.

U.S. regulators said 36.35 percent of daily oil production in U.S.-regulated areas of the Gulf of Mexico remained shut on Friday, an improvement of 6.63 percentage points from Thursday.

The threat that violence in the Middle East could escalate and disrupt flows of oil from the region persists.

A blast outside a mosque in Syria’s capital on Friday killed five security personnel and wounded others.

Britain’s Foreign Secretary William Hague urged the European Union to impose new sanctions on Iran over its nuclear program and Germany’s foreign minister later on Friday also said the EU should impose a new round of sanctions.

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.

Major Economic Events for the week of September 3-7, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Historical: From 2010 to Present

Highest:   114.81 on May 02, 2011

Average: 89.58 over this period

Lowest:   67.17 on May 25, 2010

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)