Oil Fundamental Forecast – August 1, 2016

Crude Oil continued to trade lower reaching 40.70 and is down 44 cents by midday US time. Brent Oil took cues from WTI to fall 61 cents to 42.62. Oil prices fell further toward the $40 mark in Asia on Friday, extending losses to a seventh-straight day on renewed worries about a global supply glut and increased production.

The commodity has slipped nearly 20 percent since its 2016 peak above $50 in early June as the crucial US holiday driving season comes to an end and temporary disruptions to output in Canada and Nigeria ease.

On Wednesday the US Energy Information Administration reported the first increase in US commercial crude stockpiles since May, adding that inventories were 13.4 percent up on-year and gasoline stocks were 11.8 percent higher. Supplies are now at levels not seen for two decades.

Adding to downward pressure on crude is a slow but steady rise in the number of rigs coming back online in the United States. Companies were forced to shut installations earlier this year as prices sank to near 13-year lows below $30.

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Upcoming Economic Events that you should be monitoring:

Monday, August 1, 2016

Government Bond Auctions

Date/Time Country Type

Aug 2   JPY                  10-Year JGB Auction                          -0.243%

Aug 2   USD                4-Week Bill Auction                           0.270%