Crude Oil Weekly Fundamental Analysis December 3 – 7, 2012, Forecast

Introduction:  Crude Oil is considered the king of the commodities markets.

The Strategic Petroleum Reserve is the United States’ emergency oil stockpile, and it is the largest emergency petroleum supply in the world. The reserve stores about 570 million barrels of crude oil in underground salt caverns at four sites along the Gulf of Mexico. Any dipping into this reserve is going to be big news.

Weekly Analysis and Recommendation:

Crude Oil traded in a very tight range opening on Monday at 88.13 and closing on Friday at 88.95. With traders seeing increased demand due to positive eco data in the US and China prices remained strong. Although geopolitical turmoil in the mid east subsided there remains tensions shifting between Israel and Palestine, to unrest in Egypt to the ongoing civil war in Syria, which keeps markets stressed.

EIA reports this week showed a decline in inventory which also supported prices. The completion of a Greek funding agreement helped strengthen the euro and also oil.

U.S. light sweet crude oil production continues to rise strongly as Gulf Coast refiners may be able to satisfy all of their current demand for light sweet crude oil with domestic production. Gulf Coast refiners could probably absorb additional volumes of light sweet crude oil to replace some imports of heavier crude oil streams that many of the refineries in the region are designed to use, but this could reduce the production of some high-value products and also reduce operating rates of some sophisticated refinery units used to convert low-quality, lower-priced heavy crudes into high-value products. Traditional price premiums for light crude would probably have to fall to incentivize such behavior. For this reason, increased exports may be a more attractive option for producers if an excess of light sweet crude oil in the Gulf Coast market actually develops. In the November Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) projected that U.S. crude oil production will reach 6.85 million barrels per day (bbl/d) in 2013, a 0.52-million-bbl/d increase from the 2012 level that is itself projected to be 0.78 million bbl/d above the 2011 level.

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.

Major Economic Events for the week of November 26 – 30 actual v. forecast for Euro, GPB, the Franc, and USD

Historical: From 2010 to Present

Highest:   114.81 on May 02, 2011

Average: 89.58 over this period

Lowest:   67.17 on May 25, 2010

 

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. All other PDF and HTML files are released to the Web site after 1:00 p.m. (Eastern Time) on Wednesday. Appendix D is produced during the winter heating season, which extends from October through March of each year. For some weeks which include holidays, releases are delayed by one day. (schedule)

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Government Bond Auction

Date Time Country 

Dec 03 10:30 Germany 

Dec 04 01:30 Japan 

Dec 04 10:30 Belgium 

Dec 04 15:30 UK 

Dec 05 09:30 Spain 

Dec 05 10:30 Germany 

Dec 05 11:00 Norway 

Dec 05 15:30 Sweden 

Dec 06 01:30 Japan 

Dec 06 09:50 France 

Dec 06 16:00 US 

Dec 07 16:30 Italy