Advertisement
Advertisement

Crude Oil Weekly Fundamental Analysis, November 9 – November 13, 2015 Forecast

By:
James Hyerczyk
Updated: Nov 7, 2015, 06:49 UTC

Analysis and Recommendations:  December Crude Oil futures closed lower last week after a promising early week rally failed to attract enough buyers to

Crude Oil Weekly Fundamental Analysis, November 9 – November 13, 2015 Forecast

3XL pumpjack silhouettes
Analysis and Recommendations:  December Crude Oil futures closed lower last week after a promising early week rally failed to attract enough buyers to continue the move. The market finished at $44.52, down $1.87, or 4.03%, well within the eleven week range of $39.22 to $51.42. 

Brent Crude, the global benchmark for oil, finished at $47.50 for the week after spending some time earlier in the week on the bullish side of $50.00. 

December Unleaded Gasoline bucked the trend in energy and closed higher at $1.3749, up slightly by 0.0105, or 0.77%. 

Crude oil futures traded higher early in the week, driven by technical and fundamental factors. Technically, traders were responding to the bullish weekly chart pattern formed the week-ending October 30. Fundamentally, traders were reacting to concerns over supply disruptions in Libya and Brazil. 

Libya’s National Oil Co. said the country’s oil production will drop by around 70,000 barrels a day to less than 400,000 barrels a day after the export terminal of Zueitina was blocked by an armed militia. This isn’t a huge amount, but I point it out because it signifies the sensitivity in the market at this time to any potentially bullish news. 

Problems in Brazil also helped push up prices after the country’s largest public-sector union, which represents oil-platform workers, began a strike on November 1. 

By mid-week, WTI’s top was in at $48.36. Helping to put in the top was the strong dollar and another rise in U.S. crude inventories. According to the U.S. Energy Information Administration, U.S. crude inventories rose for the sixth consecutive week, adding 2.85 million barrels the week-ending October 30. Imports, however, dropped to their lowest level since 1991. 

The week-ended with crude oil under pressure because the bullish U.S. Non-Farm Payrolls report most likely means the Fed will raise rates in December. This helped drive the U.S. Dollar to a multi-month high, weakening the dollar-denominated crude market.

The drop in imports wasn’t the only bright spot for crude oil bulls. The second was the report from Baker Hughes, which showed the number of oil rigs operating in U.S. fields fell by 6 in the previous week to a total of 572, compared with 1,568 at the same time last year. U.S. drillers have now cut rigs for 10 consecutive weeks a sign that low crude oil prices were keeping energy firms away from new production. 

U.S. gasoline managed to eke-out a small gain under volatile, two-sided trading conditions. The market rallied early in the week on crack spread trading, but fell after the EIA report, despite the EIA reporting a larger-than-expected 3.3 million barrel draw in stockpiles the week-ending October 30. 

Forecast 

Look for renewed selling pressure on crude oil prices this week based on the weak close. A stronger dollar and general worries about increasing supply should keep the pressure on the market as well as limiting any short-covering gains. 

There could be a technical bounce on the first test of the October low at $42.48. However, any rally is likely to hold the market inside its eleven week range. If $42.58 is taken out with better-than-average volume, weak longs may just throw in the towel, setting up a possible test of the contract low at $39.22 over the near-term. 

For longer-term traders, there isn’t enough bullish news out there to sustain a position. The best chance for any immediate relief isn’t likely to appear until December 4 and this won’t occur unless OPEC decides to trim production. 

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. 

Weekly December Crude Oil
Weekly December Crude Oil

 

Weekly December Unleaded Gasoline
Weekly December Unleaded Gasoline

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.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement