Oil Fundamental Forecast – September 5, 2016

Crude Oil recovered a bit of its losses to trade at 43.56 but remains well below its recent trading range as speculators take a long hard look at prices and the possibility of an agreement at the September meeting. Russia said that they see no reason to cut production as prices are recovering nicely. But Saudi Arabia’s attentions became clear as they would like to see oil prices stable before announcing the IPO for Aramco. Brent Oil is trading at 45.88. Crude prices were pushed higher by bargain-hunters Friday, but prolonged oversupply and a stronger greenback are setting the global oil market up for the worst week since January.

Opposing factors have caused sharp swings in the oil markets in recent days, starting with hints from the U.S. Federal Reserve Chairwoman Janet Yellen last Friday that the Fed could raise interest rates as early as in the coming weeks.

A steady flow of new comments from major oil suppliers have also added to the volatility. Several members of the Organization of the Petroleum Exporting Countries such as Iran and Saudi Arabia, have previously signaled they were not enthusiastic about a production cap, as prices are on a uptrend since plummeting to a 13-year low back in February.

Analysts also say that smaller OPEC producers whose oil operations were disrupted by months-long militant attacks, such as Nigeria and Libya, are likely to reject an output cap until their productions are back to their normal range.

Earlier this week, Russia signaled it is not interested in a production freeze now, given that prices are clawing back around the $50 a barrel threshold.

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Upcoming Economic Events that you should be monitoring:

 September 5, 2016

Government Bond Auctions

Date Time Country Auction

Sep 06 11:00 Austria Holds bond auction

Sep 06 11:30 UK 1.5% 2026 Gilt

Sep 06 11:30 Germany Holds I/L bond auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction