Oil Weekly Fundamental Analysis – Week of May 23, 2016

By:

Published: May 21, 2016, 07:15 UTC

Crude Oil soared this week up by 4.85% to trade at 48.45 while Brent oil gained 2.03% to close at 48.80. After a depressed Wednesday session, when oil

Crude Oil soared this week up by 4.85% to trade at 48.45 while Brent oil gained 2.03% to close at 48.80. After a depressed Wednesday session, when oil prices experienced several blows in the form of unsupportive news – most notably, the growth in US stockpiles and the Fed’s April meeting minutes. Nevertheless, crude oil prices have shown greater upside strength in Thursday’s trading, thanks to growing sentiments that the oil glut has been turned into a deficit.

Political instability in Nigeria, wildfires in Canada, liquidity issues with Venezuela, a falling Chinese economy, and declining US shale production have all contributed to thinning supply.

Nigeria, the largest African oil producing nation, has been facing militant attacks on its oilfields. These attacks have wiped out almost 500,000 barrels of oil production. At the same time, supply disruptions in Canada are taking longer than expected to come back on line. Instability in Libya also contributes to the declining supply.

Overall, these factors have reduced crude oil production by around 2.5 million barrels, exactly the amount of oversupply that caused crude oil prices to plunge by 70% in the eighteen months between 2014 and 2016.

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

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.

Major Economic Events for the week:


	Cur.	Event	Actual	Forecast	Previous
Monday, May 23, 2016
		Canada – Victoria Day
Tuesday, May 24, 2016
	USD	New Home Sales (Apr)		523K	511K
Wednesday, May 25, 2016
	CAD	Interest Rate Decision		0.50%	0.50%
	USD	Crude Oil Inventories			1.310M
Thursday, May 26, 2016
	GBP	GDP (QoQ) (Q1)		0.4%	0.4%
	GBP	GDP (YoY) (Q1)		2.1%	2.1%
	USD	Core Durable Goods Orders (MoM) (Apr)		0.3%	-0.2%
	USD	Pending Home Sales (MoM) (Apr)		0.6%	1.4%
Friday, May 27, 2016
	USD	GDP (QoQ) (Q1)		0.9%	0.5%