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Crude & Brent Oil Fundamental Analysis October 6, 2014 Forecast

By:
Barry Norman
Updated: Aug 24, 2015, 22:00 UTC

Analysis and Recommendations: Crude Oil is trading flat at 91.00 even while Brent Oil dipped 7 points to exchange at 93.35 as the global surplus of oil

Crude & Brent Oil Fundamental Analysis October 6, 2014 Forecast
Crude & Brent Oil Fundamental Analysis October 7, 2014 Forecast
Crude & Brent Oil Fundamental Analysis October 7, 2014 Forecast

Analysis and Recommendations:

Crude Oil is trading flat at 91.00 even while Brent Oil dipped 7 points to exchange at 93.35 as the global surplus of oil continues to weigh down the commodity. Brent crude dropped to the lowest level in more than two years amid signs that global supplies are outstripping demand. West Texas Intermediate rebounded after falling below $90 for the first time in 17 months.

U.S. output will rise next year to the highest since 1970, the Energy Information Administration forecast Sept. 9. The shale boom has turned the U.S. into the world’s largest producer of oil liquids, reducing its appetite for imports as global demand growth slows. Losses in WTI below $90 would slow U.S. production, Goldman Sachs Group Inc. said yesterday. Russian data showed the country’s output rose to a near post-Soviet era record. Kurdistan’s oil production over the next 15 months may increase by more than Chinese demand growth.

 Brent hit yet-another 27-month low yesterday but by the end of the day bounced back to about 94. Oil was under pressure after markets interpreted Saudi Arabia’s sharp cut in crude official selling prices as a sign of struggle among OPEC members for keeping their market share in an environment of rising global oil production.

Traders are reviewing a scenario has been a potential issue for some time now as rising crude production in non-OPEC (US) as well as some OPEC (Iraq) countries raised natural question which countries would eventually cut oil production if supply growth outpaced growth of demand. Traditionally, Saudi Arabia assumed a role of oil producer and exporter who adjusted its production according to global needs (it is the world’s only holder of spare production capacity) but prospects of rising oil production in Iraq (that became OPEC’s no.2. producer after Iran cut production due to sanctions related to its controversial nuclear programme) already led to skirmishes about which country should bear the burden nowadays. Rather that additional production in Iraq, which is being buffeted by its internal issues for the time being, fears of slower growth of oil demand and the return of Libya’s oil to markets have provided an impetus to re-open discussions about these issues that have been hanging in the air for some time.

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

3.3%

 

-5.7%

 

  CNY

 

Non-Manufacturing PMI

54.0

 

54.4

 

  EUR

 

Spanish Services PMI

55.8

57.1

58.1

 

  EUR

 

Italian Services PMI

48.8

49.6

49.8

 

  EUR

 

French Services PMI

48.4

49.4

49.4

 

  EUR

 

German Services PMI

55.7

55.4

55.4

 

  EUR

 

Services PMI (Sep)

52.4

52.8

52.8

 

  GBP

 

Services PMI (Sep)

58.7

59.1

60.5

 

  EUR

 

Retail Sales (MoM)

1.2%

0.1%

-0.4%

 

  USD

 

Nonfarm Payrolls (Sep)

 

215K

142K

 

  USD

 

Private Nonfarm

 

210K

134K

 

  USD

 

Trade Balance (Aug)

 

-40.90B

-40.60B

 

  USD

 

Unemployment Rate 

 

6.1%

6.1%

 

 

crude oil

brent oil
Upcoming Economic Events that you should be monitoring:

Cur.

 

Event

Actual

Forecast

Previous

  EUR

 

German Factory Orders

 

-2.5%

4.6%

 

  CAD

 

Ivey PMI 

 

 

50.9

 

Government Bond Auction

Date Time Country Auction

Oct 02 08:30 Spain Auctions 1.4% Jan 2020 & 2.75% Oct 2024 Obligations

Oct 02 08:50 France Eur 7-8bn 1.75% May 2023, 1.75% Nov 2024 & 2.75% Oct 2027

Oct 02 15:00 US Announces details of 3/10Y Note & 30Y bond auctions on Oct

Oct 07 06:00 Swiss Announces details of optional bond auction on Oct 08

Oct 07 09:00 Norway Bond auction

Oct 07 09:15 Austria RAGB auction

Oct 07 9:30 UK Auctions 3.5% 2045 Gilt

Oct 07 15:30 Italy Announces details of BOT auction on Oct 10

Oct 07 17:00 US 3Y Note auction

Oct 08 09:30 Germany Eur 4.0bn Oct 2019 Bobl auction

Oct 08 09:30 Swiss Bond auction (for decision)

Oct 08 15:30 Italy Announces details of BTP

Oct 08 17:00 US 10Y Note auction

Oct 09 09:03 Sweden I/L bond auction

Oct 09 17:00 US 30Y bond auction

Oct 10 09:10 Italy BOT auction

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