Crude & Brent Oil Weekly Fundamental Analysis, October 6-10 2014, Forecast

Weekly Analysis and Recommendation: 

Crude Oil continued to surprise traders falling to trade at 89.70 down $1.31 as the US dollar climbed. Brent Oil dropped to 92.20 giving up $1.23 at the close of the week. The cost of oil hit its lowest point in more than two years yesterday after Saudi Arabia ramped up output in a price war between ­producer countries. The sharp fall followed a decision this week by state producer Saudi Aramco to lower prices for European, Asian and US customers and compete for market share.

Saudi is the largest member of the Organisation of Petroleum Exporting Countries and its move surprised analysts who had expected OPEC to cut output to keep prices above $100 a barrel.

Carsten Fritsch at Commerzbank added: “OPEC appears to be gearing up for a price war. We do not expect prices to stabilize until this impression disappears and OPEC returns to co-ordinate production cuts.”

Global oil prices have been falling this year as output in Libya and Russia has increased while demand in the Far East has weakened.

Both contracts fell further after U.S. September non-farm payrolls came in better-than-expected, rising by 248,000, versus a consensus forecast for 215,000. The jobless rate fell to a six-year low. The spread between the front month Brent and U.S. crude futures contracts reached its narrowest since August 2013 at $1.42 a barrel, reflecting supply pressure on Brent and weak demand in Europe, where an overhang of unsold North Sea and West African barrels persists.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Historical: From 2011 to Present

Highest:  110.55 on Mar 01, 2012

Average: 93.60 over this period

Lowest: 74.95 on Oct 04, 2011

WEEKLY

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