Crude & Brent Oil Fundamental Analysis – November 9, 2015 – Forecast

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Updated: Nov 6, 2015, 14:15 UTC

Analysis and Recommendations: Crude Oil gained against a stronger US dollar to trade at 45.26 up by 6 cents while Brent Oil added 29 cents to trade at

Crude & Brent Oil Fundamental Analysis – November 9, 2015 - Forecast

Analysis and Recommendations:

Crude Oil gained against a stronger US dollar to trade at 45.26 up by 6 cents while Brent Oil added 29 cents to trade at 48.27. Crude oil prices edged up on Friday after falling as much as 2 percent the previous session, with analysts saying oversupply and a strong dollar would continue to weigh on fuel markets.

But the gains followed steep falls the previous day on climbing U.S. crude inventories, and analysts said oversupply would continue to pressure oil markets.

“With oil production of major producers strong, falling output from U.S. 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 U.S., 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 U.S.,” it added.

The crude oil market is in a severe contango. “Contango” is defined as the positive difference between the future contracts price and expected futures spot prices of the crude oil. December 2015 and January 2016 WTI crude oil futures showed a spread of $1 per barrel as of November 5, 2015. It’s the widest contango in the last six months. Meanwhile, the 12-month contango is at $6 per barrel. This suggests that more crude oil could be stored in super tankers. This would add pressure to oil prices.

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Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
GBP	BoE Gov Carney Speaks
AUD	Monetary Policy Meeting Minutes
JPY	BoJ Governor Kuroda Speaks
EUR	German Industrial Production (MoM)	-1.1%	0.5%	-0.6%
GBP	Industrial Production (MoM) (Sep)	-0.2%	-0.1%	0.9%
GBP	Manufacturing Production (MoM)	0.8%	0.4%	0.4%
GBP	Trade Balance (Sep)	-9.35B	-10.60B	-10.79B
GBP	Trade Balance Non-EU (Sep)	-2.08B	-3.30B	-3.84B
USD	FOMC Member Bullard Speaks
USD	Average Hourly Earnings (MoM) (Oct)	0.4%	0.2%	0.0%
USD	Nonfarm Payrolls (Oct)	271K	180K	137K
USD	Participation Rate (Oct)	62.4%		62.4%
USD	Private Nonfarm Payrolls (Oct)	268K	165K	149K
USD	Unemployment Rate (Oct)	5.0%	5.1%	5.1%