Crude & Brent Oil Fundamental Analysis October 31, 2014 Forecast

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Updated: Aug 25, 2015, 07:00 UTC

Analysis and Recommendations: Crude Oil reversed gains from Wednesday to trade in the red today down 69 cents at 81.51 while Brent Oil fell 68 cents to

Crude & Brent Oil Fundamental Analysis October 31, 2014 Forecast

Analysis and Recommendations:

Crude Oil reversed gains from Wednesday to trade in the red today down 69 cents at 81.51 while Brent Oil fell 68 cents to book at 86.45. Crude collapsed into a bear market this month as Saudi Arabia and other producers deepened price discounts for their oil. US crude production climbed to the highest level in at least 31 years last week as the shale boom moved the country closer to energy independence. Global consumption will increase this year at the slowest pace since 2009, according to the International Energy Agency.

“China is taking advantage of lower oil prices and ramping up its imports,” said Cuneyt Kazokoglu, an oil consultant at FGE, an international energy consultancy group based in London. “Refinery runs have reached record highs in September, but they are also stockpiling oil,” he added. Kazokoglu stated that this is a temporary move, while downside risks are bigger than the upside potential. “In the short-term, the possibility of oil price going below $80 is greater than of it recovering above $90,” he added.

In 2013, China has become the largest net importer of crude oil in the world due to its economic growth and its demand surpassing production growth, according to the U.S. Energy Information Administration.

“There have been some buying and physical differentials which tell us that demand is picking up in Asia, fuelled by lower prices,” said Vira Chauhan, an oil analyst for London-based energy market consultancy Energy Aspects. The increasing value of the U.S. dollar weakened the purchasing power of oil dependent countries, since oil prices are indexed to the dollar worldwide, while the shale oil production boom in the U.S. hampers its oil import volume, decreasing the global demand. In addition, Asian countries’ growth rate revealed to be below expectations, decreasing the energy-hungry countries’ oil demand, while the European markets recovered slower than anticipated.

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 actual vs. forecast:

Cur.	Event	Actual	Forecast	Previous
AUD	HIA New Home Sales	0.0%		3.3%
GBP	Nationwide HPI (YoY)	9.0%	8.5%	9.4%
GBP	Nationwide HPI (MoM)	0.5%	0.3%	-0.1%
GBP	MPC Member Cunliffe
EUR	Spanish GDP (QoQ)	0.5%	0.5%	0.6%
EUR	German Unemployment	-22K	5K	9K
EUR	German Unemployment	6.7%	6.7%	6.7%
USD	GDP (QoQ) (Q3)		3.0%	4.6%
USD	GDP Price Index (QoQ)		2.0%	2.1%
USD	Initial Jobless Claims		283K	283K
USD	Fed Chair Yellen Speaks

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
JPY	Household Spending		-4.3%	-4.7%
JPY	National Core CPI (YoY)		3.0%	3.1%
JPY	Tokyo Core CPI (YoY)		2.5%	2.6%
AUD	PPI (YoY) (Q3)			2.3%
AUD	PPI (QoQ) (Q3)			-0.1%
AUD	Private Sector Credit		0.4%	0.4%
JPY	BoJ Press Conference
EUR	German Retail Sales		-1.0%	2.5%
EUR	French Consumer		-0.3%	-0.7%
EUR	Italian CPI (MoM)		-0.2%	-0.4%
EUR	Core CPI (YoY) (Oct)		0.8%	0.8%
EUR	CPI (YoY) (Oct)		0.4%	0.3%
EUR	Unemployment Rate		11.5%	11.5%
USD	Core PCE Price Index			1.5%
CAD	GDP (MoM) (Aug)		0.0%	0.0%
USD	Chicago PMI (Oct)		60.0	60.5
USD	Michigan Consumer		86.4	86.4