Share

Crude & Brent Oil Fundamental Analysis, May 8, 2015 – Forecast

oil thursday bnsnlaAnalysis and Recommendations:

Crude Oil reversed early losses to gain 24 cents trading at 61.18 remaining off its high over $62 earlier this week. Brent Oil added 48 cent as it continues to climb to 68.25. Crude oil soared well above its trading range following the persistent gains in the global prices. WTI Crude oil futures hit highs above $62 per barrel today, striking a fresh five months high amid tensions in the Persian Gulf. Last week, a US Navy Destroyer sailed to the Strait of Hormuz after reports that Iranian gunboats had fired shots at a Marshall Islands-flagged cargo ship. The Ship was detained and oil traders are watching the overall developments quite anxiously. The commodity gained yesterday even as US stocks dropped as protests disrupted exports from an eastern Libyan port.

US crude inventories continue to edge higher. US commercial crude inventories increased by 1.9 million barrels last week, maintaining a total US commercial crude inventory of490.9 million barrels, the 15th consecutive week of a higher total than at any time in at least 80 years, according to the US Energy Information Administration (EIA) weekly petroleum status report. Oil inventories have been surging over last few months but the latest spree of gains has not been able to exert a downward influence on crude as the commodity edged up from a seven year low near $44 per barrel in March 2015 and extended the upside throughout the last month.

In the last two weeks the price of Brent crude grew by 8.8% and that of US WTI oil even by 9.3%. We see the main reasons for the growing prices a reaction to the weekly data on stocks (and production) of oil in the United States and in the exchange rate fluctuations of the US dollar (which weakened quite significantly over the commented period). A less stable situation in key regions in terms of oil production may also be playing a role, albeit to a lesser extent.

As concerns the former factor, stocks of oil in the USA continued to grow in the past weeks, thus hitting new and all-time highs, but their growth rate has decelerated (and most recently even fell). Oil production data drew attention, although these data in the weekly report are largely based on model forecasts. Regarding the latter factor, oil prices (and commodity prices in general) were also encouraged by the unexpected depreciation of the dollar; the US currency weakened by 3% against the basket of currencies in the last two weeks.

Data from the ICE exchange on positions in Brent futures caught the eye again. Last week the net speculative position again reached its highest level in the report’s history (since 2011). However, it is still true that the number of investors holding short positions remains fairly high from a historical perspective. This suggests that a ‘broader consensus’ about further oil price developments does not exist at the moment. It also means that the period of high volatility in oil prices is probably not yet over.

ForexTraq 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 up to the data analysis and information 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

 

Employment Change (Apr)

-2.9K

5.0K

48.2K

   

  AUD

 

Full Employment Change (Apr)

-21.9K

 

41.3K

   

  AUD

 

Unemployment Rate (Apr)

6.2%

6.2%

6.1%

 

 

  EUR

 

German Factory Orders (MoM)

0.9%

1.5%

-0.9%

 

 

  RUB

 

Central Bank reserves (USD)

 

 

353.5B

 

 

  USD

 

Initial Jobless Claims

 

280K

262K

 

 

 oil thurs

Upcoming Economic Events that you should be monitoring:

Friday, May 8, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  CNY

 

Trade Balance (Apr)

 

39.45B

3.08B

 

 

  USD

 

Nonfarm Payrolls (Apr)

 

224K

126K

 

 

  USD

 

Unemployment Rate (Apr)

 

5.4%

5.5%

 

 

  CAD

 

Employment Change (Apr)

 

-5.0K

28.7K

   

Government Bond Auctions

Date Time Country

May 07 08:30 Spain Auctions 0.5% Oct 2017 Bono, 0.55%

May 07 09:10 France Auctions OATs

May 07 09:10 Sweden Holds inflation-linked bond auction

May 08 10:00 Norway Details bond auction on 12 May

May 08 15:30 Italy Announces details of BTP

May 12 09:15 Norway Holds bond auction

May 13 09:10 Italy Auctions BTPs/CCTeus

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

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

May 14 09:30 UK Auctions 2% 2020 Conventional Gilt

 

Leave a Comment