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Crude & Brent Oil Fundamental Analysis – November 20, 2015 – Forecast

By:
Barry Norman
Updated: Nov 19, 2015, 11:48 UTC

Analysis and Recommendations: Crude Oil added 18 cents to 42.14 while Brent Oil added 32 points to 44.46 as traders reviewed the situation in the Middle

Crude & Brent Oil Fundamental Analysis – November 20, 2015 – Forecast

Crude & Brent Oil Fundamental Analysis – November 20, 2015 - Forecast
Crude & Brent Oil Fundamental Analysis – November 20, 2015 - Forecast
Analysis and Recommendations:

Crude Oil added 18 cents to 42.14 while Brent Oil added 32 points to 44.46 as traders reviewed the situation in the Middle East and ISIS while news from Iran, Iraq and Russia seemed to indicate that they are going to continue to pump record amounts of oil.  The contract fell below $40 for the first time since August on Wednesday, and traders said that the slight gains were more a result of short covering than a more bullish sentiment.

Overall, oil markets remain oversupplied, with rising US stockpiles the most visible evidence.

In the last two weeks, markets were primarily dominated by U.S. labor market data, which have significantly increased the likelihood of a hike in the U.S. official interest rates in December. Nevertheless, the direct impact on the oil market was limited and primarily stemmed from the appreciation of the U.S. dollar. In addition, market attention was attracted to weaker data on China’s foreign trade for October, which disappointed markets again. Even so, the rate of increase in oil imports to China has remained very reasonable in recent months. Nonetheless, at the end of the commented period the price of Brent crude approached the six-year lows of late August.

The Paris events of recent days may lead to increased tension in the Middle East, but we are not seeing any direct impact on the oil market. The situation paradoxically tends to involve negative demand-pull and consequently price risks, in the short term in particular, as the territories controlled by the Islamic State are not important for global oil production.

Despite the slight gains on Wednesday, most analysts expect prices to remain at low levels for the rest of the year and into 2016 as production continues to outpace demand.

“While the growth in U.S. unconventional production appears to be slowly abating, the upsurge in Organization of the Petroleum Exporting Countries output, robust global stock levels, and ongoing uncertainty around the strength of demand suggest that the oversupply and surpluses are likely to continue well into next year, exerting continued downward pressure on prices,” the Center for Strategic and International Studies said in its 2016 outlook on Wednesday.

Analyst estimates for oversupply in 2015 range from 0.7 to 2.5 million barrels of oil being produced per day in excess of demand.

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.

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.

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  NZD

 

PPI Input (QoQ) (Q3)

1.6%

0.1%

-0.3%

 

 

  JPY

 

Adjusted Trade Balance

-0.20T

-0.38T

-0.31T

   

  JPY

 

Exports (YoY) (Oct)

-2.1%

-2.1%

0.6%

 

 

  JPY

 

Trade Balance (Oct)

112B

-292B

-115B

 

 

  JPY

 

BoJ Press Conference  

 

 

 

 

 

  EUR

 

German Buba President Weidmann  

 

 

 

 

 

  GBP

 

BoE MPC Member Broadbent Speaks  

 

 

 

 

 

  GBP

 

Core Retail Sales (MoM) (Oct)

-0.9%

-0.5%

1.5%

   

  GBP

 

Core Retail Sales (YoY) (Oct)

3.0%

3.9%

5.7%

   

  GBP

 

Retail Sales (MoM) (Oct)

-0.6%

-0.5%

1.7%

   

  GBP

 

Retail Sales (YoY) (Oct)

3.8%

4.2%

6.2%

   

  GBP

 

CBI Industrial Trends Orders (Nov)

 

-10

-18

 

 

  EUR

 

ECB Account of Monetary Policy  

 

 

 

   

 

crude oil

Upcoming Economic Events that you should be monitoring:

Friday, November 20, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  JPY

 

BoJ Monthly Report

 

 

 

 

 

  EUR

 

German PPI (MoM) (Oct)

 

-0.2%

-0.4%

 

 

  EUR

 

ECB President Draghi Speaks  

 

 

 

 

 

  EUR

 

German Buba President Weidmann

 

 

 

 

 

  USD

 

FOMC Member Bullard Speaks  

 

 

 

 

 

  USD

 

Baker Hughes U.S. Rig Count

 

 

574

   

Government Bond Auctions

Date Time Country

Nov 19 10:30 Spain 0.25% Apr 2018 Bono, 1.15% Jul 2020 Bono, 5.4% Jan 2023

Nov 19 10:50 France Eur 7-8bn; 4.25% Oct 2018 OAT, 0.25% Nov 2020 OAT, 2.25%

Nov 19 11:50 France Eur 1-1.5bn; 0.25% Jul 2024, 1.85% Jul 2027, 3.15% Jul 2032

Nov 19 N/A US Holds 10-year TIPS auction

Nov 20 16:30 Italy Announces details of CTZ/BTPei on 25 Nov

Nov 23 12:00 Belgium Auctions OLOs

Nov 23 N/A US Holds 2-year note auction

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 N/A Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 N/A US Holds 5-year note auction

Nov 25 11:03 Sweden Holds bond auction

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 N/A US Holds 2-year FRN auction

Nov 25 N/A US Holds 7-year note auction

Nov 26 11:03 Sweden Holds bond auction

Nov 27 11:03 Sweden Holds bond auction

Nov 27 11:10 Italy Auctions BTPs/CCTeus

 

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