Crude & Brent Oil Fundamental Analysis – August 7, 2015 – Forecast

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Updated: Aug 6, 2015, 12:12 UTC

Analysis and Recommendations: Crude Oil continued to decline falling 24 points to 44.91 while Brent Oil fell to 49.55 down by 4 cents in the session.

Crude & Brent Oil Fundamental Analysis – August 7, 2015 - Forecast

Analysis and Recommendations:

Crude Oil continued to decline falling 24 points to 44.91 while Brent Oil fell to 49.55 down by 4 cents in the session. OPEC, which includes Saudi Arabia and other major crude producers, has been producing about 1.7 million bpd in surplus since deciding in November to favor market share over price defense. The ensuing glut knocked Brent down 18 percent in July. U.S. crude tumbled even more, 21 percent, for its biggest monthly decline since the 2008 financial crisis.

Despite a precipitous decline in the US rig count, greater efficiency has allowed US domestic production to rise by roughly 500k barrels since the end of 2014, according to Bloomberg data. In addition to still-robust US production, investors have had to contend with rising supply from the Middle East as well as with the prospect of even more supply from that region. With the pending Iran deal, other Middle Eastern producers appear to be ramping up production in an effort to defend market share. Thanks to rising production from Saudi Arabia and Iraq, Organization of Petroleum Exporting Countries (or OPEC) production is up more than 1.5 million barrels per day since the start of the year, according to Bloomberg data.

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Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
AUD	Employment Change (Jul)	38.5K	10.0K	7.0K
AUD	Unemployment Rate (Jul)	6.3%	6.0%	6.1%
EUR	German Factory Orders (MoM) (Jun)	2.0%	0.2%	-0.3%
GBP	Halifax House Price Index (YoY) (Jul)	7.9%	8.2%	9.6%
GBP	Industrial Production (MoM) (Jun)	-0.4%	0.1%	0.3%
GBP	Manufacturing Production (MoM)	0.2%	0.2%	-0.6%
GBP	BoE Inflation Report
GBP	BoE QE Total (Aug)	375B	375B	375B
GBP	Interest Rate Decision (Aug)	0.50%	0.50%	0.50%
GBP	BoE MPC Meeting Minutes

Upcoming Economic Events that you should be monitoring:

Friday, August 7, 2015

Cur.	Event	Actual	Forecast	Previous
JPY	BoJ Press Conference
USD	Nonfarm Payrolls (Jul)		223K	223K
USD	Unemployment Rate (Jul)		5.3%	5.3%
CAD	Employment Change (Jul)		5.0K	-6.4K
CAD	Ivey PMI (Jul)		52.0	55.9