Crude & Brent Oil Fundamental Analysis – November 10, 2015 – Forecast

Analysis and Recommendations:

Crude Oil is holding gains through the day up by 20 cents 44.50 after taking a nose dive on Friday. Brent Oil is up 33 cents at 48.50. But the gains followed steep falls the previous day on climbing US crude inventories, and analysts said oversupply would continue to pressure oil markets.

“With oil production of major producers strong, falling output from US shale will be insufficient to balance the oversupplied oil market over the next two years,” said BMI Research, a subsidiary of rating agency Fitch Group.

“The US, Russia and OPEC combined to produce more than 50 percent of global crude, and output from these producers has increased over 2015 despite weakening production in the US,” it added.

French investment bank Natixis said it had “seen few signs recently indicating a change of tack in the oil markets”, and that “oil prices will remain under pressure as long as the surplus remains in the market”.

A bullish US jobs market report last week sent the dollar higher, which would make dollar-priced oil more expensive for holders of weaker currencies, hurting demand and prices. The US government released a surprisingly strong October jobs report that showed the US economy still growing at a firm rate, with the unemployment rate falling to 5.0 percent on the back of 271,000 new jobs created, nearly double the number in September. “That led to strong gains of the dollar on expectations for an increase in the interest rate by the Federal Reserve in their next meeting scheduled in December,” said Sanjeev Gupta, head of the Asia Pacific oil and gas practice at professional services firm EY. A hike in interest rates encourages investors back to US assets for higher returns, pushing the dollar higher. Data showing that crude imports from China, the world’s second-biggest oil consumer, fell to the lowest level in five months is also helping keep a lid on prices in the face of a world supply glut.

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 up to the data analysis and information in our weekly reports.

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Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, November10, 2015

Government Bond Auctions

Date Time Country

Nov 10 10:30 UK 0.125% 2058 I/L Gilt auction

Nov 10 N/A Holland Eur 2.0-3.0bn 0% Apr 2018 DSL

Nov 10 N/A US Holds 10-year note auction

Nov 11 10:03 Sweden Holds bond auction

Nov 11 11:15 Norway Holds bond auction

Nov 11 10:30 Germany Eur 3bn 0.25% Oct 2020 Bobl

Nov 12 10:10 Italy Auctions BTPs/CCTeus

Nov 12 10:30 UK 4.25% 2039 Gilt auction

Nov 12 N/A US Holds 30-year bond auction