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Crude Oil Brent Oil Fundamental Analysis, May 13, 2015 Forecast

Analysis and Recommendations (Cure Oil And Brent Oil Forecast):

Crude Oil reversed early losses to make solid gains adding 52 cents to trade at 59.77 as Brent Oil outpaced WTI adding 77 cents to 66.39.

Commodity prices fell across the board yesterday and oil was no exception. Price of the front-month contract (ICE) on Brent fell by about three quarters of a percent (and so did the price of WTI though the most recent forecast of US shale oil production from the US Energy Information Agency showed the agency expects yet another decline in crude oil production in the key regions in June.

On the other hand, a Baker Hughes’ Rig Count report released on Friday unveiled that the overall drilling activity in the US again declined but the pace of decline (again) slowed down; the decline in rig count was the smallest so far this year (see the chart below). In a combination with still-rising productivity and news about revision of earlier production cuts of several US shale oil producers, this in our view lays the ground for a correction of recent sharp increase in oil prices.

Tuesday’s moves helped extend a recent rally in oil prices which has been driven by signs of slowing U.S. oil production. Nymex West Texas Intermediate crude is up around 11% year-to-date and Brent crude is up around 13% so far this year.

Oil-market fundamentals, however, remain weak, Goldman Sachs said in a report. The bank estimates that the global oil market will be oversupplied by 1.9 million barrels a day in the current quarter, the largest quarterly stock build this year.

“We therefore view this rally as derailing this rebalancing and setting the stage for sequentially weaker prices,” Goldman said.

According to the bank, supply and demand balance points to an only gradual decline in elevated inventories in 2016 as production growth from low-cost producers such as Saudi Arabia, Iraq and Russia help offset strong demand growth and declining production from other markets. Goldman also said that WTI settling above $60 a barrel could lead to U.S. producers ramping up activity again.

ForexTraq provides in-depth analysis for each currency and commodity we review in forex trading. 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 up to the data analysis and information for Crude Oil and Brent Oil in our weekly reports.

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.

Today’s economic releases actual vs. forecast:

Cur. Event Actual Forecast Previous
  AUD Home Loans (MoM) (Mar) 1.6% 1.0% 1.1%
  JPY 10-Year JGB Auction 0.434% 0.369%
  GBP Industrial Production (MoM) 0.5% 0.1% 0.1%
  GBP Manufacturing Production 0.4% 0.3% 0.5%
  GBP NIESR GDP Estimate 0.6%
  USD JOLTs Job Openings (Mar) 5.085M 5.133M

 

Upcoming Economic Events that you should be monitoring in forex trading:

Wednesday, May 13, 2015

Cur.   Event Actual Forecast Previous
  NZD RBNZ Gov Wheeler Speaks
  JPY Adjusted Current Account 1.34T 0.60T
  AUD Wage Price Index (QoQ) (Q1) 0.6% 0.6%
  CNY Fixed Asset Investment (YoY) 13.5% 13.5%
  CNY Industrial Production (YoY) 6.0% 5.6%
  EUR German CPI (MoM) (Apr) -0.1% -0.1%
  EUR German GDP (QoQ) (Q1) 0.5% 0.7%
  GBP Claimant Count Change (Apr) -20.0K -20.7K
  GBP Unemployment Rate (Mar) 5.5% 5.6%
  EUR GDP (QoQ) (Q1) 0.5% 0.3%
  EUR Industrial Production (MoM) 0.2% 1.1%
  GBP BoE Inflation Report
  EUR ECB Monetary Policy Meeting
  USD Core Retail Sales (MoM) (Apr) 0.5% 0.4%
  USD Retail Sales (MoM) (Apr) 0.2% 0.9%
  USD Crude Oil Inventories -3.882M

Government Bond Auctions

Date Time Country

May 12 08:10 Dutch Eur 2-3bn 0.25% Jul 2025 DSL

May 12 09:15 Norway Eur 4bn 4.5% May 2019 bond

May 12 09:30 Germany Eur 1bn 0.1% Apr 2026 I/L Bund

May 12 17:00 US USD 24bn 3-year notes

May 13 09:10 Italy Eur 2.5-3bn 0.25% May 2018 & Eur 2-2.5bn 1.35% Apr 2022

BTPs, plus Eur 1-1.5bn 1.65% Mar 2032 & 3.25% Sep 2046

May 13 09:30 Germany Eur 3bn 0.5% Feb 2025 Bund

May 13 14:30 Sweden Details bond auction on 20 May

May 13 17:00 US USD 24bn 10-year notes

May 14 09:00 Ireland Eur 0.75bn 0.8% Mar 2022 IGBs

May 14 09:30 UK GBP 3.75bn 2% Jul 2020 Conventional Gilt

May 14 15:00 US Announces details of 10-year TIPS sale on 21 May

May 14 17:00 US USD 16bn 30-year bond

May 18 09:30 Germany Eur 1.5bn 12M (May 2016) Bubills

May 18 10:00 Belgium Auctions OLOs

 

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