Crude Oil Fundamental Analysis August 21, 2013 Forecast

Analysis and Recommendations:

Crude Oil continued to ease giving up almost $1 to trade at 105.91 in a quiet trading day ahead of tomorrow’s FOMC minutes and the API inventory due shortly. Investors took profits ahead of the latest Fed comments on the scaling back of its stimulus program although unrest in Egypt and reduced Libyan oil product supply curtailed the losses. Investors are waiting for the minutes from the Fed’s latest policy meeting which are due on Wednesday for new clues on when it plans to taper its monthly $85 billion in asset purchases which have supported commodities in recent years. Many believe tapering could begin next month. Supporting oil prices, U.S. commercial crude inventories likely fell last week by 1.4 million barrels, an initial poll of Reuters analysts showed ahead of the release of weekly data.

Libya was forced to suspend contractual obligations with a force majeure on some oil exports on Monday, acknowledging weeks of disruption which have cut shipments to their lowest since the civil war of 2011. About half of Libya’s over 1.2-million-barrel-per-day export capacity remains shut down, industry sources said. Libya’s port authority asked customers to remove their tankers from the Es Sider oil export terminal late on Monday to prevent any potential illegal oil sales. Tensions in Egypt remained high after security forces arrested the top leader of the Muslim Brotherhood, pressing a crackdown on the group according to a report on Reuters.

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