Weekly Analysis and Recommendation: Crude Oil bounced up and down all week but little had to do with real supply and demand factors. Terrorism,
Crude Oil bounced up and down all week but little had to do with real supply and demand factors. Terrorism, geopolitical tensions and OPEC comments kept the prices moving. The only winners were energy speculators which push up prices to sell only to buy on the bottoms to sell again on the top. Brent Oil ended the week at 44.89 and WTI at 41.77. Crude oil showed a weekly gain of 3.42% a remarkable climb.
Before US markets went on holiday, the US Department of Energy released data showing the country´s commercial crude supplies in the week to November 20 rose at a slower pace, giving a bit of relief from a supply glut.
Reports that Russia is not taking military action against Turkey for the shooting down of one of its fighter jets on the Syrian border also eased fears that the tense situation in the region could escalate and disrupt oil supplies.
Moscow on Thursday said retaliatory measures will focus on using its leverage to tighten the screws on Turkey´s economy, including halting joint economic projects, restricting financial and trade transactions and changing customs duties.
The oversupply in the oil market is killing prices, and it’s only set to get worse in 2016. Oil prices are over 50% lower than they were last year, but according to Goldman Sachs and an OPEC official, oil could crater to near $20 per barrel in 2016.
Venezuelan oil minister Eulogio del Pino said on Sunday that OPEC could not allow an oil-price war and must take action to stabilize the crude market soon. When asked how low oil prices could go in 2016 if OPEC didn’t change its policy, he said: “mid-20s.”
Meanwhile, Michele Della Vigny from Goldman Sachs told the “Today” program on BBC’s Radio 4 that oil could fall to as little as $20 a barrel. He added, however, that there was only about a “15% probability that this might happen” and that if oil were to fall to this level, it would only be temporary “shock to the system” before the market stabilized again.
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
Major Economic Events for the week:
Event Consensus Previous
TUESDAY, DEC 01
JPY Bank of Japan Governor Kuroda
AUD RBA Interest Rate Decision 2% 2%
AUD RBA Rate Statement
EUR Unemployment Change (Nov) -5K -5K
EUR Unemployment Rate (Nov) 6.4% 6.4%
WEDNESDAY, DEC 02
AUD RBA’s Governor Glenn Stevens
EUR Consumer Price Index 1.1% 1.1%
EUR Consumer Price Index 0.2% 0.1%
EUR Producer Price Index -0.4% -0.3%
EUR Producer Price Index -3.2% -3.1%
CAD BoC Interest Rate Decision 0.5%
CAD BOC Rate Statement
THURSDAY, DEC 03
EUR ECB Interest Rate Decision 0.05% 0.05%
EUR ECB press conference
USD Fed’s Yellen testifies
FRIDAY, DEC 04
USD Unemployment Rate 5% 5%
USD Nonfarm Payrolls (Nov) 200K 271K
CAD Change in Employment 0.7K 44.4K
CAD Unemployment Rate 7% 7%
Upcoming Government Bond Auctions
Date Time Country
Dec 01 11:30 UK 1.5% 2021 Gilt auction
Dec 02 16:30 Sweden Announces details of Bond on 11 Dec
Dec 03 10:30 Spain Auctions
Dec 03 10:50 France Auctions OATs
Dec 03 11:03 Sweden Holds I/L bond auction
Dec 04 11:03 Sweden Holds I/L bond auction