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Oil Weekly Fundamental Analysis – May 2-6, 2016 – Forecast

By:
Barry Norman
Published: Apr 30, 2016, 10:50 UTC

Crude Oil ended the week with a gain of over 5% to 46.02 while Brent oil closed at 47.39 as the rally continued all week.  Oil prices ended steady Friday

Oil Weekly Forecast

Crude Oil ended the week with a gain of over 5% to 46.02 while Brent oil closed at 47.39 as the rally continued all week.  Oil prices ended steady Friday after hitting 2016 highs, but finished April trading about 20 percent higher, with Brent crude having its best monthly gain in seven years.

A weaker U.S. dollar amid optimism that a global oil glut will ease have lifted crude futures by more than $20 a barrel since they plumbed 12-year lows under $30 in the first quarter.

But others warned the rally was driven by investors holding large speculative positions, while oil stockpiles were still high, with a Reuters survey showing OPEC output in April rising to its highest level in recent history.

“The issue is that we haven’t seen price rallies … correlate with fundamentals,” said Hamza Khan, senior commodity strategist at ING. “The fundamentals — high stocks, high production — haven’t changed.”

Technical analysts said crude could cruise to $50 a barrel but stiffer resistance before $55 could spark profit-taking on the market’s biggest rebound in two years.

Analysts polled by Reuters raised their average forecast for Brent in 2016 to $42.30 per barrel, the second consecutive month of increases.

Bank of America Merrill Lynch said in a note that “non-OPEC oil supply is indeed hanging off a cliff” and estimated that global output would contract year-on-year in April or May for the first time since 2013.

The OPEC survey aside, Saudi oil output was expected to edge up by 350,000 barrels per day to around 10.5 million bpd, sources told Reuters, as tankers filled with unsold oil floated at sea seeking buyers. (International Business Times)

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.

crude oil w

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:

Time Cur. Event Actual Forecast Previous  
Sunday, May 1, 2016
  CNY Manufacturing PMI (Apr)   50.4 50.2  
Monday, May 2, 2016
      United Kingdom – Early May Bank Holiday
      China – Labor Day
    CNY Caixin Manufacturing PMI (Apr)     49.7  
    EUR German Manufacturing PMI (Apr)   51.9 51.9  
    USD ISM Manufacturing PMI (Apr)   51.5 51.8  
Tuesday, May 3, 2016
    Japan – Constitution Day
    CNY Caixin Manufacturing PMI (Apr)   49.9 49.7  
    AUD Interest Rate Decision (May)   2.00% 2.00%  
    GBP Manufacturing PMI (Apr)   51.2 51.0  
Wednesday, May 4, 2016
    Japan – Greenery Day
    NZD Employment Change (QoQ) (Q1)     0.9%  
    GBP Construction PMI (Apr)   54.0 54.2  
    USD ADP Nonfarm Employment Change (Apr)   200K 200K  
    USD ISM Non-Manufacturing PMI (Apr)   54.6 54.5  
    USD Crude Oil Inventories     1.999M  
Thursday, May 5, 2016
      Japan – Children’s Day
    AUD Retail Sales (MoM) (Mar)   0.3%    
    GBP Services PMI (Apr)   53.5 53.7  
Friday, May 6, 2016
    USD Nonfarm Payrolls (Apr)   200K 215K  
    USD Unemployment Rate (Apr)   5.0% 5.0%  
    CAD Employment Change (Apr)   -1.5K 40.6K  
    CAD Ivey PMI (Apr)     50.1

 

Upcoming Government Bond Auctions

Date Time Country 

Mar 02 13:00 Norway Details of bond auction on Mar 04

May 04 11:05 Norway Holds bond auction

May 04 11:30 Germany Eur 4bn Apr 2021 Bobl

May 04 11:50 France Holds bond auction

May 04 17:20 Sweden Details of bond auction on May 11

May 05 10:30 Spain Holds bond auction

May 05 11:00 Austria Holds bond auction

 

 

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