Crude & Brent Oil Fundamental Analysis – November 16, 2015 – Forecast

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Updated: Nov 13, 2015, 12:38 UTC

Analysis and Recommendations: Crude Oil recovered 27 cents but remains near recent lows at 42.02 as global oil supplies continue to increase as well as US

Crude & Brent Oil Fundamental Analysis – November 16, 2015 - Forecast

Analysis and Recommendations:

Crude Oil recovered 27 cents but remains near recent lows at 42.02 as global oil supplies continue to increase as well as US inventory levels. Brent Oil added 59 cents to 45.77 trading near recent lows after Iraq turned up production and is about to export 7 cargo vehicles to the US. World oil production and supplies continue to grow as Saudi Arabia pushed OPEC forward in its attack on US shale producers. Crude oil is pacing for its worst weekly performance in the last three months as concerns about slowing global growth and a strengthening dollar have commodity traders hitting the sell button. And that has one group of traders very happy: short sellers.

“Open interest increased by 33,000 contacts on, so that’s a significant addition of shorts,” BNP Paribas’ head of U.S. cash equity trading, Darren Wolfberg, said Thursday on CNBC’s “Futures Now.” Government data released Thursday showed U.S. supplies rose for the seventh straight week.

Wolfberg explained that when open interest rises on a day that an asset is down — crude oil fell 3 percent Wednesday — it means that traders are making new bets that the price will go lower. Conversely, he added that in early October, the increase in open interest was tied to a move higher in crude oil, reflecting more long positions.

At the same time, oil producers have hiked their short positions in Brent futures to record highs of almost 1.3 million in a sign that they are increasingly hedging their production in expectation of falling prices.

Beyond high production and brimming storage tanks, sentiment was also hit by a growing sense that the region’s two biggest economies were slowing sharply after China’s factory output growth eased further.

The slowdown in China has pulled down the entire commodity sector, with products like crude, copper, liquefied natural gas, coal and iron ore all down between 20 and 30 percent this year, on a re-based basis valued at 100 points on January 1.

Adding to demand worries are fears that Japan’s economy may have fallen into recession.

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:

Cur.	Event	Actual	Forecast	Previous
JPY	Industrial Production (MoM) (Sep)	1.1%	1.0%	1.0%
JPY	Tertiary Industry Activity Index (MoM)	-0.4%	0.2%	0.2%
EUR	German GDP (YoY) (Q3)	1.8%	1.8%	1.6%
EUR	German GDP (QoQ) (Q3)	0.3%	0.3%	0.4%
EUR	GDP (YoY) (Q3)	1.6%	1.7%	1.5%
EUR	GDP (QoQ) (Q3)	0.3%	0.4%	0.4%
EUR	Trade Balance (Sep)	20.5B	18.2B	11.2B
USD	Core PPI (MoM) (Oct)		0.1%	-0.3%
USD	Core Retail Sales (MoM) (Oct)		0.4%	-0.3%

Upcoming Economic Events that you should be monitoring:

Monday, November 16, 2015

Cur.	Event	Actual	Forecast	Previous
NZD	Retail Sales (QoQ) (Q3)			0.1%
JPY	GDP (QoQ) (Q3)		-0.1%	-0.3%
JPY	GDP (YoY) (Q3)		-0.2%	-1.2%
EUR	Core CPI (YoY) (Oct)			0.9%
EUR	CPI (YoY) (Oct)
EUR	CPI (MoM) (Oct)		0.1%	0.2%
USD	NY Empire State Manufacturing Index		-5.00	-11.36