Oil Fundamental Forecast – June 27, 2016

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Published: Jun 24, 2016, 10:54 UTC

Crude Oil tanked on a strong dollar and increased global fears after Britain voted to leave the Eurozone. WTI is down 2.56 at 47.55 and Brent Oil is down

Oil Fundamental Forecast – June 27, 2016

Crude Oil tanked on a strong dollar and increased global fears after Britain voted to leave the Eurozone. WTI is down 2.56 at 47.55 and Brent Oil is down 2.65 at 48.26 which is one of the most spectacular pump and dumps seen in a long time as traders pushed up prices only to dump regardless of the outcome.

Financial markets have been worried for months about what Brexit, or a British exit from the European Union, would mean for Europe’s future, but were clearly not fully factoring in the risk of a leave vote.

British Prime Minister David Cameron, who campaigned to remain in the EU, said he would stand down by October.

Earlier in the day, both contracts were down by more than $3, or over 6 percent, the biggest intra-day declines for both since April 18, when a meeting of top global oil producers failed to agree on an output freeze.

Sterling sank 10 percent in value to its weakest since the mid-1980s. The FTSE 100 fell more than 8 percent at the open, with banks among the hardest hit.

“In the interim, it’s down for everything from equities to oil. Bad economies in the UK and Europe are not good for oil and there could be a domino effect on other economies in Asia,” said IHS oil analyst Victor Shum.

Some analysts said oil could face further downward pressure.

“Our view is that we have not yet seen the low oil price of the day with Brent likely to trade down toward $45 or lower before we have seen the worst of it,” Bjarne Schieldrop, chief commodity analyst at SEB, said in note to clients.

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Upcoming Economic Events that you should be monitoring:

Monday, June 27, 2016

Country	Name	Volatility	Previous
Spain	Parliamentary Election	2
NZ	Trade Balance (MoM)	2	292
NZ	Imports	2	4.01
NZ	Trade Balance (YoY)	2	-3.66
NZ	Exports	2	4.3
U.S.	Markit Services PMI	2	51.3
U.S.	Markit PMI Composite	2	50.9
U.S.	Dallas Fed Manufacturing	2	-20.8
U.S.	Gross Domestic Product Price Index	2	0.6
U.S.	Gross Domestic Product Annualized	2	0.8
U.S.	Personal Consumption Expenditures Prices	2	0.3
U.S.	Core Personal Consumption Expenditures	2	2.1
U.S.	S&P/Case-Shiller Home Price Indices	2	5.4
U.S.	Consumer Confidence	2	92.6