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Oil Fundamental Forecast – February 11, 2016

By:
James Hyerczyk
Published: Feb 10, 2016, 13:57 UTC

Analysis and Recommendations: Crude Oil rose on Wednesday after four days of weakness, supported by the prospect that OPEC and Non-OPEC producers will

Oil Fundamental Forecast – February 11, 2016

oil weekly Jim
Analysis and Recommendations:

Crude Oil rose on Wednesday after four days of weakness, supported by the prospect that OPEC and Non-OPEC producers will cooperate to fight the supply glut that has sent prices to a 12-year low.

Earlier in the session, the market found support after Iran’s oil minister said Tehran was ready to negotiate with Saudi Arabia, and the Kremlin’s oil tsar Igor Sechin proposed producing countries reduce output by 1 million barrels per day, without saying whether non-OPEC member Russia would participate in the production cut.

Although traders and delegates aren’t putting much faith in the rhetoric from Iran and Russia, the news has been supportive for the market. Brent crude was up 57 cents at $30.89 a barrel. The contract was down sharply on Tuesday, posting a 7.8 percent decline. U.S. WTI Crude Oil was trading 59 cents higher at $28.53.

Late Tuesday, the American Petroleum (API), an industry group, said crude stocks rose by 2.4 million barrels in the week to Feb. 5, less than the 3.6-million barrel rise expected by analysts. On Wednesday, the U.S. Energy Information Administration’s report is expected to show that crude oil inventories rose 3.55 million barrels for the week-ended February 5.

Today’s price action will be determined by the strength of the rumors regarding the production cuts. If the rumor begins to gain traction then look for the short-covering to continue. If the rumor goes away then look for a resumption of the selling pressure.

A stronger stock market could also be supportive for crude oil. Traders will also be watching the testimony of Fed Chair Janet Yellen because it will affect the dollar and crude oil is a dollar-denominated commodity. If Yellen is hawkish then the dollar is likely to rise. This could help limited gains in the crude oil market. If Yellen is dovish then crude oil may attract some supportive buying.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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.

Today’s economic releases:

China – Lunar New Year  
  USD API Weekly Crude Oil Stock  2.400M  3.80M 3.837M  
  NZD Electronic Card Retail Sales (MoM)  0.3% 0.3% -0.2%  
  AUD Westpac Consumer Sentiment  4.2% -1.0% -3.5%  
  AUD HIA New Home Sales (MoM) (Dec)  6.0%   -2.7%  
  GBP Industrial Production (MoM) (Dec)  -1.1% -0.1% -0.7%  
  GBP Manufacturing Production (MoM)  -0.2% 0.1% -0.4%  
  GBP NIESR GDP Estimate     0.6%  
  USD Fed Chair Yellen Testifies        
  USD Crude Oil Inventories   3.933M 7.792M  
  USD FOMC Member Williams Speaks        
  USD Federal Budget Balance (Jan)   45.0B -14.0B
  NZD   Business NZ Pmi (Jan)     56.7    
  GBP   RICS House Price Balance (Jan)   52% 50%    
30-Minute Brent Crude Oil
30-Minute Brent Crude Oil
30-Minute Crude Oil
30-Minute Crude Oil

Upcoming Economic Events that you should be monitoring: 

China – Lunar New Year  
   EUR Eurogroup Meetings        
  USD Initial Jobless Claims   281K 285K  
  USD Fed Chair Yellen Testifies        
  AUD RBA Governor Stevens Speaks   3.933M 7.792M  
  AUD Home Loans (MoM) (Dec)        

Thursday, February 11, 2016

 Government Bond Auctions

Date Time and Country

Feb 11 N/A Italy Euro 4-5bn 30-yr syndicated bond auction

Feb 11 11:03 Sweden Holds I/L bond auction

Feb 11 11:10 Italy Announces details of bond auction

Feb 11 11:30 UK 3.5% 2045 Gilt auction

Feb 11 19:00 US Holds 30-year bond auction

Feb 11 n/a US Details of 30-yr TIPS auction on Feb 18

Feb 12 11:10 France Details of bond auction on 18 Feb

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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