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Barry Norman
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Crude & Brent Oil Fundamental Analysis October 15, 2014 Forecast

Analysis and Recommendations:

Crude Oil is trading at 84.91 declining 83 cents while Brent Oil fell more than crude as a price war between Iraq and Saudi Arabia accelerated. OPEC has not cut production quotas as of yet, while Libya continues producing record amounts of oil.  US dollar- priced commodities tend to fall when the dollar rallies as they become more expensive for holders of other currencies. The greenback rebounded a little overnight, but remained not far from one-month lows.

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Brent crude fell below $88 a barrel on Tuesday, returning to a nearly four-year low hit the day before, after the world’s energy watchdog cut its estimates for oil demand this year and next.

The global oil benchmark has dropped more than 20 percent from its 2014 high in June as supplies have risen and global demand has slowed, creating a glut in many markets.  The International Energy Agency said on Tuesday world oil demand growth would be much weaker than expected and suggested oil prices may drop further.

Oil prices dropped as much as 1.3 percent in New York, the fifth decline in six days. Oil consumption will increase by about 650,000 barrels a day this year, 250,000 below the previous estimate, the Paris-based agency said in its monthly market report. U.S. crude stockpiles probably expanded by 2.5 million barrels to a two-month high last week, according to a Bloomberg News survey before a report from the Energy Information Administration on Oct. 16.

Oil futures have collapsed into bear markets as shale supplies boost U.S. output to the most in almost 30 years and global demand weakens. The biggest producers in the Organization of Petroleum Exporting Countries are responding by cutting prices, sparking speculation that they will compete for market share rather than reduce supply. Saudi Arabia won’t alter its supplies much between now and the end of the year, a person familiar with its oil policy said on Oct. 3.

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 actual vs. forecast:

 

Cur.

 

Event

Actual

Forecast

Previous

 

  GBP

 

BRC Retail Sales Monitor (YoY) (

-2.1%

1.0%

1.3%

 

 

  AUD

 

NAB Business Confidence (Sep)

5

 

7

 

 

  EUR

 

French CPI (MoM) (Sep)

-0.4%

-0.3%

0.4%

 

 

  EUR

 

French HICP (MoM) (Sep)

-0.4%

-0.3%

0.5%

 

 

  EUR

 

Spanish CPI (MoM) (Sep)

0.2%

0.2%

0.2%

 

 

  EUR

 

Italian CPI (MoM) (Sep)

-0.4%

-0.3%

-0.4%

 

 

  GBP

 

CPI (MoM) (Sep)

0.0%

0.2%

0.4%

 

 

  GBP

 

CPI (YoY) (Sep)

1.2%

1.4%

1.5%

 

 

  GBP

 

PPI Input (MoM) (Sep)

-0.6%

-0.4%

-1.2%

 

 

  EUR

 

German ZEW Conditions (Oct)

3.2

18.0

25.4

 

 

  EUR

 

German ZEW Sentiment (Oct)

-3.6

1.0

6.9

 

 

  EUR

 

Industrial Production (MoM)

-1.8%

-1.6%

0.9%

 

 

  EUR

 

ZEW Economic Sentiment

4.1

7.1

14.2

 

 

Upcoming Economic Events that you should be monitoring:

 

Cur.

 

Event

Actual

Forecast

Previous

Wednesday, October 15

 

  CNY

 

CPI (YoY) (Sep)

 

1.7%

2.0%

 

 

  EUR

 

ECB President Draghi

 

 

 

 

 

  GBP

 

Claimant Count Change

 

-35.0K

-37.2K

 

 

  USD

 

Core Retail Sales (MoM)

 

0.3%

0.3%

 

 

  USD

 

PPI (MoM) (Sep)

 

0.1%

0.0%

 

 

  USD

 

Retail Sales (MoM)

 

-0.1%

0.6%

 

 

  EUR

 

ECB President Draghi  

 

 

   

Government Bond Auction

Date Time Country Auction

Oct 14 08:30 Spain 6 & 12M T-bill auction

Oct 14 09:30 Belgium 3 & 12M T-bill auction (Jan & Oct 2015)

Oct 15 09:03 Sweden Bond auction

Oct 15 09:30 Germany Eur 4.0bn Sep 2016 Schatz auction

Oct 16 08:30 Spain Bono/Obligacion auction

Oct 16 09:30 UK Auctions 0.125% 2024 I/L Gilt

Oct 16 15:00 US Announces details of 30Y TIPS auction on Oct 23

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