Oil Price Fundamental Daily Forecast – Prices Drift Lower Ahead of European Manufacturing Data

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging lower on Monday after giving back its earlier gains. The selling is being fueled by profit-taking after Friday’s unexpected surge tied to the bullish U.S. jobs report and optimism over a U.S.-China trade deal. Fundamentally, gains were likely capped by concerns over upcoming European and U.S. data. Additionally, worries over lower global demand growth continue to cast a bearish pall on the market.

At 07:32 GMT, December WTI crude oil is trading $56.06, down $0.14 or -0.25% and January Brent crude oil is at $61.54, down $0.15 or -0.24%.

Trade Talk Optimism, Better Jobs Data

After being pressured all week, crude oil rebounded substantially on Friday after the world’s two economies said they had made progress on trade talks while U.S. officials said the deal could be signed this month. The markets were also goosed higher by better-than-expected U.S. jobs data.

Rig Count Falls Again

The U.S. oil and gas rig count fell again during the week-ending November 1, according to Baker Hughes, continuing the downward trend with a drop of 8 rigs for the week. That marks the tenth decrease in eleven weeks.

The total oil and gas rig count now stands at 822, or 245 down from this time last year.

The total number of active oil rigs in the United States decreased by 5 according to the report, reaching 691. The number of active gas rigs decreased by 3 to reach 130.

Oil rigs have seen a loss of 183 rigs year on year, with gas rigs down 63 since this time last year.

Keystone Pipeline Shutdown

Also helping to underpin oil prices is the shutdown of the Keystone pipeline that sends Canadian heavy crude to the United States. Owner TC Energy said on Friday work was underway to plug the pipeline in North Dakota.

Saudi Aramco IPO

On Sunday, Saudi Aramco finally kick-started its initial public offering (IPO), but offered scant details on the number of shares to be sold, pricing or the date for a launch.

Daily Forecast

Until the supply estimates are released late Tuesday and early Wednesday, the primary focus for traders will be on any news regarding the completion of Phase One of the U.S.-China trade deal.

Today’s focus will be on potential demand issues, given the release of Euro Zone Manufacturing PMI data and U.S. Factory Orders. Of particular interest will be German Final Manufacturing PMI, which is expected to come in at 41.9. Euro Zone Manufacturing PMI is expected to come in at 45.7. U.S. Factory Orders may have fallen by 0.5% in October.