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Oil Monthly Fundamental Forecast – February 2016

By:
Barry Norman
Published: Jan 30, 2016, 13:40 UTC

Outlook and Recommendation Crude Oil reversed and gained significantly at the end of the week on hopes of production cuts from OPEC and Russia, but there

Oil Weekly Forecast

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Outlook and Recommendation

Crude Oil reversed and gained significantly at the end of the week on hopes of production cuts from OPEC and Russia, but there is no guarantee the possible talks will lead anywhere. Crude oil prices are up 4.88% on the week but down almost 9% on the month.  Oil closed at 33.76 after touching lows at $29. Brent Oil closed at 35.91 rising from $30 this month.

The great commodity slump has entered a new and dangerous stage, with two of the globe’s most important raw materials diving to fresh depths on growing fears of a Chinese slowdown.

Oil plunged to its lowest point since 2003 as West Texas intermediate (WTI), the North American benchmark, declined to $29 a barrel. It has lost 15 per cent of its value in the first few days of

Mounting anxiety over China is to blame for much of the recent havoc in commodity prices. The Asian giant’s frenetic growth propelled the world’s booming demand for raw materials over the past decade and its deceleration has already inflicted major damage on commodity prices.

The fear now is that even more losses may lie ahead if China devalues its currency as a way to make its exports more attractive and stem the flight of capital out of the country.

The jump came after supply data from the U.S. Energy Information Administration revealed domestic production has edged lower. A report on Reuters that Russia and the Organization of the Petroleum Exporting Countries will discuss a possible cut to output also provided a boost to oil prices. However, other reports said Russia had no plans of cooperating with OPEC.

In other oil-related news, Royal Dutch Shell shareholders on Wednesday approved the company’s proposed $70 billion takeover of BG Group shareholders will vote Thursday on the takeover. BG shares turned higher by 3.5%. They had been lower after a ratings downgrade to neutral at Credit Suisse, which cited valuation as a factor. Shell shares closed up 2.9%.

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.

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Upcoming Economic Events that you should be monitoring:

Date Currency Forecast Previous  
Feb 1 CNY Manufacturing PMI 49.6 49.7
CNY Caixin Manufacturing PMI 48.1 48.2
GBP Manufacturing PMI 51.8 51.9
USD ISM Manufacturing PMI 48.6 48.2
Feb 2 AUD Cash Rate 2.00% 2.00%
AUD RBA Rate Statement
GBP Construction PMI 57.5 57.8
NZD Employment Change q/q 0.8% -0.4%
NZD Unemployment Rate 6.1% 6.0%
Feb 3 AUD Building Approvals m/m 4.6% -12.7%
AUD Trade Balance -2.45B -2.91B
GBP Services PMI 55.4 55.5
USD ADP Non-Farm 191K 257K
USD ISM Non-Manufacturing 55.2 55.3
Feb 4 GBP BOE Inflation Report
GBP Monetary Policy Summary
GBP Official Bank Rate 0.50% 0.50%
USD Unemployment Claims 286K 278K
Feb 5 AUD RBA Policy Statement
AUD Retail Sales m/m 0.4% 0.4%
CAD Employment Change 22.8K
CAD Trade Balance -2.0B
CAD Unemployment Rate 7.1%
USD Average Hourly Earnings 0.3% 0.0%
USD Non-Farm Employment 192K 292K
USD Unemployment Rate 5.0% 5.0%
Feb 8 CNY Trade Balance
Feb 10 GBP Manufacturing Production m/m
Feb 11 USD Unemployment Claims
Feb 12 EUR German Prelim GDP q/q
USD Core Retail Sales m/m
USD Retail Sales m/m
USD Prelim UoM Consumer
Feb 14 JPY Prelim GDP q/q -0.2%
Feb 15 NZD Retail Sales q/q
Feb 16 AUD Monetary Policy Meeting
NZD Inflation Expectations q/q
GBP CPI y/y
EUR German ZEW Economic
CAD Manufacturing Sales m/m
NZD GDT Price Index
Feb 17 GBP Average Earnings Index
GBP Claimant Count Change
USD Building Permits
USD PPI m/m
USD FOMC Meeting Minutes
NZD PPI Input q/q
Feb 18 AUD Employment Change
AUD Unemployment Rate
CNY CPI y/y
USD Philly Fed Manufacturing
USD Unemployment Claims
Feb 19 GBP Retail Sales m/m
CAD Core CPI m/m
CAD Core Retail Sales m/m
USD CPI m/m
USD Core CPI m/m
Feb 23 EUR German Ifo Business
GBP Inflation Report Hearings
USD CB Consumer Confidence
Feb 25 AUD Private Capital
GBP Second Estimate GDP q/q
USD Core Durable Goods
USD Unemployment Claims
NZD Trade Balance
Feb 26 USD Prelim GDP q/q

 

 

 

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