Crude & Brent Oil Fundamental Analysis November 24, 2015 – Forecast

Analysis and Recommendations:

Crude Oil tumbled $1.29 to 40.61 as global production continued to soar and the US dollar rallied. Brent Oil fell 88 cents to 43.78 as traders prepare for next week’s OPEC meeting. World oil prices have more than halved in the past 18 months as global production has outpaced consumption, and the IEA on Friday predicted that demand will grow by a sluggish 1.2 million barrels next year.

Crude oil and copper are unlikely to rebound because of excess supplies, Goldman predicts. Consequently, the bank is keeping its outlook for U.S. WTI crude oil at $45 a barrel and for Brent crude oils at $50 a barrel in 2016 due to oversupply.

OPEC expects oil prices to average around $80 per barrel over the long term. The EIA projects that crude oil prices could average around $50 per barrel in 2015 and $51 per barrel in 2016. The current turmoil in the energy market suggests that major investments banks like JPMorgan Chase, Goldman Sachs, and Citigroup could revise their crude oil forecast over the long term. Société Generale estimates that crude oil prices could trade at an average of $49.40 per barrel in 2016. The World Bank estimates that crude oil prices could average $52 per barrel in 2015. Citigroup forecasts that WTI oil prices could hit $32 per barrel due to oversupply concerns.

The US Dollar Index appreciated against the basket of global currencies. The US Dollar Index rose by 0.2% against the global currencies. However, it hit a seven-month high against the euro and a three-month high against the yen. The US dollar appreciated due to the consensus of a rate hike by the Fed in December 2015. The US CFTC released its weekly COT (Commitment of Traders) report on November 16, 2015. The data highlighted that hedge funds increased their long position to $33.3 billion between the second week of October 2015 and the week ending November 10, 2015. The appreciating US dollar will weigh on dollar-denominated crude oil. As a result, we could see more bloodbaths in the oil market.

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:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, November 24, 2015

Government Bond Auctions

Date Time Country

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