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Oil Weekly Fundamental Analysis – May 16-20, 2016 -Forecast

By:
Barry Norman
Published: May 14, 2016, 05:22 UTC

Crude Oil saw a huge gain this week adding 3.85% as the wildfire continued to blaze across the Canadian oil fields. Late in the week workers were finally

Oil Weekly Forecast

Crude Oil saw a huge gain this week adding 3.85% as the wildfire continued to blaze across the Canadian oil fields. Late in the week workers were finally able to return to the fields and production might resume in a week or so. Crude oil is trading at 46.38 near the very top of its range while Brent oil ended at 47.89 up 5.55% on shifting Saudi outlooks.

The pain of low oil prices and over supply may be easing as global stockpiles reduce and signs of an increase in demand begin to look more realistic. The International Energy Agency sees strength coming back to the market but the stronger dollar is weighing on the price this week.

American crude production is gradually decreasing and is down more than 8 percent from its highs in 2015 to 8.8 million barrels a day, according to the US Energy Information Administration. Production has been reported falling for the past 9 weeks.

The report also revealed an unexpected decline this week in crude inventories by 3.4 million barrels.

Canadian oil output was temporarily hit due to closure of plants following the severe wildfires last week.

The shift in energy leadership in Saudi Arabia surprised the market at the beginning of the week as 20-year industry veteran Ali Al Naimi stepped down and handed the mantle of Saudi’s oil policy to the former health minister and Chairman of Saudi Aramco, Khalid al-Falih.

This shift was part of a wider government reshuffle by Deputy Crown Prince Mohammed bin Salman and Al-Falih takes over a newly merged ministry of energy, industry and mineral wealth.

Al-Naimi will no doubt welcome the move as he has been attempting to retire for several years, but many industry watchers had expected him to remain at the helm until after the June meeting.

With the collapse of the Doha talks last month, the Saudi government is making it clear its time to move on. Al Naimi meanwhile stays connected with the government as advisor to the Royal Court.

The market welcomed al-Falih’s somewhat expected appointment due to his intense knowledge and his experience of the oil industry, but no-one expects a change in Saudi Arabia’s policy.

All eyes are beginning to focus on OPEC’s first official meeting of 2016 on June 3rd in Vienna.

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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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.

Major Economic Events for the week:

 
Cur. Event Actual Forecast Previous
Tuesday, May 17, 2016
    GBP CPI (YoY) (Apr)   0.5% 0.5%  
    USD Building Permits (Apr)   1.130M 1.076M  
    USD Core CPI (MoM) (Apr)   0.2% 0.1%  
Wednesday, May 18, 2016
    JPY GDP (QoQ) (Q1)   0.1% -0.3%  
    GBP Average Earnings Index +Bonus (Mar)   1.7% 1.8%  
    GBP Claimant Count Change (Apr)   4.0K 6.7K  
    EUR CPI (YoY) (Apr)   -0.2% -0.2%  
    USD Crude Oil Inventories     -3.410M  
Thursday, May 19, 2016
    AUD Employment Change (Apr)   12.5K 26.1K  
    GBP Retail Sales (MoM) (Apr)   0.5% -1.3%  
    USD Philadelphia Fed Manufacturing Index   3.5 -1.6  
Friday, May 20, 2016
    CAD Core CPI (MoM) (Apr)   0.1% 0.7%  
    CAD Core Retail Sales (MoM) (Mar)   -0.5% 0.2%  
    USD Existing Home Sales (Apr)   5.40M 5.33M

Upcoming Government Bond Auctions

Date Time Country 

May 13 12:00 Iceland Holds bond auction

May 18 11:30 Germany Eur 4bn Feb 2026 Bund

May 18 17:20 Sweden Announces details of bond auction on May 25

May 19 10:30 Spain Holds bond auction

May 19 11:03 Sweden Hold bond auction

May 19 11:50 France Holds bond auction

May 20 11:03 Sweden Sek 1.992bn 0.5% Jun 2017 I/L bond

 

 

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