Crude & Brent Oil Fundamental Analysis – August 17, 2015 – Forecast

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Updated: Aug 14, 2015, 09:40 UTC

Analysis and Recommendations: Crude Oil continued to decline falling 28 cents to 41.96 unable to break the $42 resistance line while Brent Oil was off by

Crude & Brent Oil Fundamental Analysis – August 17, 2015 - Forecast

Analysis and Recommendations:

Crude Oil continued to decline falling 28 cents to 41.96 unable to break the $42 resistance line while Brent Oil was off by 11 cents at 49.53. U.S. crude oil fell to its lowest in almost six-and-a-half years on Friday as huge stockpiles and refinery shutdowns added to concerns about global oversupply and slowing economies in Asia.

Oil had already tumbled more than 3 percent on Thursday, driven by a report that stocks at Cushing, Oklahoma, the delivery point for U.S. crude futures, rose more than 1.3 million barrels in the week to Aug. 11.

The contract earlier hit an intraday low of $42.35, its lowest since March 4, 2009. Brent crude traded at $49.00, down 22 cents and some way off its 2015-low of $45.19 reached in January.

U.S. crude is much weaker than the North Sea benchmark, partly due to a spate of refinery outages that has sapped U.S. demand. The largest of those refineries – BP PLC’s 413,500 barrels per day (bpd) facility in Whiting, Indiana, also the biggest in the U.S. Midwest – has been forced to shut two-thirds of its capacity for repairs to a leak that could last a month or more.

Although China’s crude oil demand has so far remained strong as authorities take advantage of cheap oil to build up strategic reserves and consumers kept spending despite the slowing economy, there are signs of weakening, with the devaluation of the yuan potentially denting fuel imports.

China’s implied oil demand fell in July from the previous month amid a continuing drop in the nation’s vehicle.

Analysts at JPMorgan estimate around $235 billion of private capital left China between the third quarter of 2014 and the end of the second quarter this year.

China’s slump may be spreading across Asia. Japan’s economy likely shrank in April-June as exports slumped and consumers cut back on spending, a Reuters poll showed.

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Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
EUR	German GDP (QoQ) (Q2)	0.4%	0.5%	0.3%
EUR	CPI (YoY) (Jul)	0.2%	0.2%	0.2%
USD	PPI (MoM) (Jul)		0.1%	0.4%

Upcoming Economic Events that you should be monitoring:

Monday, August 17, 2015

Cur.	Event	Actual	Forecast	Previous
JPY	GDP (QoQ) (Q2)		-0.5%	1.0%
JPY	GDP (YoY) (Q2)		-1.9%	3.9%
EUR	Trade Balance (Jun)			18.8B
USD	NY Empire State Manufacturing Index		5.00	3.86
CAD	Foreign Securities Purchases (Jun)			-5.45B