Oil Monthly Fundamental Forecast – September 2016

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Updated: Sep 1, 2016, 12:45 UTC

Crude Oil closed the month at 46.92 but well below highs seen just a week ago. Crude oil gained over 11% for the month but remains overpriced and is

Oil Monthly Fundamental Forecast – September 2016

Crude Oil closed the month at 46.92 but well below highs seen just a week ago. Crude oil gained over 11% for the month but remains overpriced and is signaling a sell moving into September. Brent Oil broke the $50 price for a few hours last month but closed at 46.92 matching WTI’s declines. Market sentiment has become increasingly polarized and volatile. Long and short positions held by money managers (MM) reached 323 Mbbl and 220 Mbbl, respectively, for NYMEX WTI in the week ending August 9th, representing the largest speculative long position since May 2015, while shorts reached their highest level since records began in mid-2006. This left crude particularly vulnerable to sharp price movements, like we’ve witnessed over the past two weeks. For instance, the current rally — which has pushed WTI up almost 20% since August 11th — coincided with another round of OPEC freeze negotiations chatter and comments from Saudi Energy Minister al-Falih, who indicated that the Kingdom may be more amenable to negotiations this time around. Short-covering by those caught on the wrong side of this momentum accentuated the move up, confirmed by the 57k (26%) w/w reduction in MM shorts for the week ending August 16^th.

OPEC members and large non-OPEC producers like Russia have begun discussing another attempt to freeze production, to be decided at a September meeting in Algiers — call it Doha 2.0. While it is highly unlikely that this meeting yields a hard production agreement, participants are in a slightly different position than when they met in Doha on April 17th. Many producers are pumping far more today than they were in the month prior to the Doha meeting, meaning that there is little downside to these participants agreeing to hold output at current levels

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September Major Economic Events
Date	Country	Name	Volatility	Previous
9/1/2016	USD	ISM Manufacturing PMI	3	52.6
9/1/2016	USD	ISM Prices Paid	3	55
9/2/2016	USD	Nonfarm Payrolls	3	255
9/2/2016	USD	Unemployment Rate	3	4.9
9/6/2016	AUD	RBA Interest Rate Decision	3	1.5
9/6/2016	AUD	RBA Rate Statement	3
9/6/2016	EUR	Gross Domestic Product Y	3
9/6/2016	EUR	Gross Domestic Product Q	3
9/6/2016	GBP	Inflation Report Hearings	3
9/7/2016	GBP	NIESR GDP Estimate (3M)	3	0.3
9/7/2016	CAD	BOC Rate Statement	3
9/7/2016	CAD	BoC Interest Rate Decision	3	0.5
9/8/2016	EUR	ECB Interest Rate Decision	3	0
9/8/2016	EUR	ECB Monetary press conference	3
9/9/2016	GBP	Consumer Inflation Expectations	3	2
9/13/2016	GBP	Core Consumer Price Index Y	3	1.3
9/13/2016	GBP	Consumer Price Index Y	3	0.6
9/15/2016	AUD	Fulltime employment	3	-45.4
9/15/2016	AUD	Part-time employment	3	71.6
9/15/2016	AUD	Employment Change	3	26.2
9/15/2016	AUD	Participation Rate	3	64.9
9/15/2016	AUD	Unemployment Rate	3	5.7
9/15/2016	GBP	BoE Interest Rate Decision	3	0.25
9/15/2016	GBP	BoE Asset Purchase Facility	3	435
9/15/2016	GBP	Monetary Policy Summary	3
9/15/2016	USD	Retail control	3	0
9/15/2016	USD	Retail Sales – M	3	0
9/15/2016	USD	Retail Sales ex Autos – M	3	-0.3
9/20/2016	AUD	RBA Meeting’s Minutes	3
9/20/2016	JPY	BoJ Press Conference	3
9/21/2016	JPY	BoJ Interest Rate Decision	3	-0.1
9/21/2016	JPY	BoJ Monetary Policy Statement	3
9/21/2016	EUR	Non-monetary policy’s ECB meeting	3
9/21/2016	USD	FOMC Economic Projections	3
9/21/2016	USD	Fed’s Monetary Policy Statement	3
9/21/2016	USD	Fed Interest Rate Decision	3	0.5
9/21/2016	USD	FOMC Press conference	3
9/22/2016	NZD	RBNZ Interest Rate Decision	3	2
9/26/2016	USD	Durable Goods Orders	3	4.4
9/26/2016	USD	Durable Goods Orders CORE	3	1.5
9/29/2016	USD	Gross Domestic Product Annualized	3	1.1
9/30/2016	USD	Fed’s Yellen Speech	3