OIL

[Samirofi]

Oil Weekly Outlook for September 16-20

Oil prices (WTI and Brent) changed direction and declined last week: WTI decreased by 2.10%; Brent oil, by 2.88%. As a result, the spread of Brent oil over WTI shrank again: The premium ranged between $3.86 and $4.57. The sharp fall in Libya’s oil exports is likely to keep the spread from further contracting. According to the latest EIA weekly update, oil stockpiles rose by 4.087Mb. In the U.S, imports, refinery inputs and production increased during last week. Will oil change direction again and this time rally next week? This week, several reports and events may affect the oil market. These items include: FOMC meeting, U.S’s industrial production, Philly Fed index, and EIA oil weekly report.

Oil Prices – September

During last week, crude oil price (WTI) fell by 2.10% and reached by Friday $108.21/b; further, Brent oil also decreased by 2.88% to $112.78/b;

In the chart below are the daily changes in WTI and Brent oil prices during the year (prices are normalized to January 31st). As seen in the chart, the oil changed direction and fell last week.

Premium of Brent over WTI – September

The gap between Brent and WTI oil slightly shrank last week as it ranged between $3.86 and $4.57 per barrel. Moreover, during the week, the premium decreased by 18.25%.

oil Stockpiles – Increased again by 4.087Mb

The oil stockpiles rose again by 4.087 MB and reached 1,821.3 million barrels. The linear correlation between the changes in stockpiles has remained stable at -0.196: this correlation suggests that oil price, assuming all things equal, will fall next week.

Oil imports to the U.S rose again by 0.3% last week. The weekly shifts in oil imports have a mid-strong negative correlation (-0.262) that implies oil price may decline again next week. Moreover, oil production also slightly increased; refinery inputs also rose by 0.4% last week. In total, the rally in production, refinery inputs and imports might further loosen the U.S oil market.

The next weekly update will be published on Wednesday, September 18thand will refer to the week ending on September 13th.Middle East and Oil – The tensions keep oil prices up

The decline in possibility of U.S intervening in the Syrian crisis may have also eased some of the concerns in the Middle East and its effect on oil prices. I still think these concerns are a bit overblown and oil prices might keep falling in the coming weeks. Libya’s drop in oil exports to only 150k of barrels a day – in 2010 this country produced 1.6 million barrels a day, may have also contributed to the rally of oil prices and the rise in the spread between Brent and WTI. The upcoming OPEC report could shed some additional light about the changes in Libya’s exports and production. If Libya’s oil exports remain low, it could keep Brent oil price above $110 and the spread between Brent and WTI closer to $10.

OPEC’s Production Fell in August

According to OPEC’s recent report, the production fell by 0.256 mb/d and reached 30.234 mb/d. This drop in mostly due to Libya’s decline in production that fell from 1 mb/d to 0.529 mb/d. Conversely, Saudi Arabia and Iraq increased their production, which helped curb the decline in production. This recent fall in production may have contributed to the rise in oil prices.

IEA Monthly Report

The IEA showed in its recent monthly update that global supply has fallen by 0.77 mb/d during August – due to drop in OPEC and non-OPEC countries’ supply. On the other hand, the forecast for global demand growth in 2013 hasn’t changed.

Oil Related News for the Week

Wednesday – FOMC Meeting: The FOMC will decide whether it will taper QE3. Many analysts expect the FOMC to start taper its long term treasury bonds purchase program. If the Fed only reduces QE3, it is likely to drag down oil prices. If the Fed doesn’t introduce any changes to its monetary policy, oil prices might rally. In any case, the FOMC’s statement, outlook and press conference that follow are likely to move commodities markets;

Thursday – Philly Fed Manufacturing Index: In the latest survey regarding August, the growth rate fell from +19.8 in July to +9.3 in August. If the index continues to slowdown, it may positively affect not only U.S Dollar but also U.S equity markets and commodities (the recent Philly Fed review);

Oil Price Outlook and Breakdown

From the supply side, the ongoing rise in refinery inputs, production and imports could pull down oil price. The U.S oil storage rose again last week; this is another signal for an increase in supply or a decline in demand; this, in turn, may suggest the U.S oil market has loosened. From the demand side, next week’s reports including U.S industrial production, and Philly Fed index could signal the potential developments in the demand for oil in U.S. If these reports surpass current market expectations, they could positively affect the price of oil. The upcoming FOMC meeting could affect the USD, which, in turn, may also affect the oil market: If the Fed tapers QE3, this could adversely affect oil prices. The spread between Brent and WTI may remain around the $4-$5. Finally, the fundamentals suggest oil prices should decline again in the near future, even though the tensions in the Middle East will keep oil prices elevated.

The bottom line, on a weekly scale I guess oil price will fall (providing of course there won’t be a sudden escalation in the Middle East (including Syria, Libya, Egypt and Iran).

[PCMAnalyst]

The price is in a bearish trend in the H4 TF. we will have the continuation of the drop if the $105 breaks above.

[PCMAnalyst]

We can see the price reversing by having it reached to the resistant level in the weekly TF. as long as $113 level is not violated we will be still on short side of the market.

[PCMAnalyst]

The price is swinging in the upper section of the consolidation area in the monthly TF. we expect it climbs by having stabilized above $100.

[Samirofi]

Oil Weekly Outlook for September 23-27


Oil prices (WTI and Brent) tumbled down again during last week: WTI fell by 3.27%; Brent oil, by 3.16%. As a result, the spread of Brent oil over WTI remained nearly unchanged: The premium ranged between $2.53 and $5.73. Based on the latest EIA weekly update, oil stockpiles fell by 6.08Mb. In the U.S, imports fell last week, while, refinery inputs and production rose. Will oil continue its downward trend next week? This week, several reports and events may affect the oil market. These items include: U.S GDP, China’s manufacturing PMI, U.S’s durable goods and EIA oil weekly update.

Oil Prices – September

During the previous week, crude oil price (WTI) decreased by 3.27% and reached by Friday $104.67/b; further, Brent oil also fell by 3.16% to $109.22/b;

In the chart below are the daily shifts in WTI and Brent oil prices during the year (prices are normalized to January 31st). As seen in the chart, the oil decreased in the past couple of weeks.




Premium of Brent over WTI – September

The gap between Brent and WTI oil didn’t move much last week as it ranged between $2.53 and $5.73 per barrel. Moreover, during the week, the premium decreased by 0.44%.



Oil Stockpiles – Fell by 6.08Mb

The oil stockpiles changed direction and fell by 6.08 MB and reached 1,815.2 million barrels – its lowest level in the past several weeks. The linear correlation between the changes in stockpiles has remained stable at -0.201: this correlation suggests that oil price, assuming all things equal, will rally next week.

Oil imports to the U.S also fell by 1.1% last week. The weekly changes in oil imports have a mid-strong negative correlation (-0.266) that implies oil price may rise next week. Conversely, oil production increased; refinery inputs also rose again by 0.4% last week. In total, the rally in production, refinery inputs might loosen the U.S oil market, while the drop in oil imports may tighten the oil market.

The next weekly update will be published on Wednesday, September 25thand will refer to the week ending on September 20th.

Middle East and Oil

The potential backing down of U.S from entering Syrian crisis may have reduced the concerns such a development could have on the oil market and stability of in the Middle East. On the other hand, Libya’s low oil exports, which are around 150k of barrels a day – in 2010 this country produced 1.6 million barrels a day, may keep oil prices high and perhaps even expand the spread between Brent and WTI.

Oil Related News for the Week

Monday – China Manufacturing PMI: This is HSBC’s flash manufacturing PMI survey for September. Last month’s report regarding August 2013 the Manufacturing PMI rallied to 50.1 – i.e. China’s manufacturing sectors is expanding. If in the upcoming report the PMI continues to rise, it could signal growth in China’s economy.

Wednesday – U.S Core Durable Goods: This report will pertain to August 2013. This monthly report may indirectly indicate the changes in U.S. demand for commodities such as oil and gas. As of July 2013, new orders of manufactured durable goods declined to $485 billion; if this report shows another drop in new orders, then it could pull down not only the USD but also commodities prices;

Thursday – Final U.S GDP 2Q 2013 Estimate (final): This will be the third and last estimate of U.S’s second quarter 2013 real GDP growth. In the recent estimate the U.S GDP rose by 2.5% in the second quarter of 2013. If in the last estimate, the growth rate for the second quarter is substantially revised, this could affect oil prices;

Oil Price Forecast and Breakdown

From the supply side, the recent rise in refinery inputs and production could keep pulling down oil price. But the recent drop in oil imports may pressure oil prices up. Further, the U.S oil storage changed direction and fell last week; this is another signal for a decrease in supply or a rise in demand; this, in turn, may suggest the U.S oil market has tightened. From the demand side, next week’s reports including U.S GDP, China’s manufacturing PMI and U.S core durable goods could signal the potential developments in the demand for oil in U.S and China – two leading consumers of oil. If these reports surpass current market expectations, they could positively affect the price of oil. The spread between Brent and WTI may remain around the $4-$5 until new developments in the Middle East or Libya will unfold. Finally, the fundamentals suggest oil prices should keep falling in the mid-term as long as tensions in the Middle East are under control.

The bottom line, on a weekly scale, however, I guess oil price will change direction and rally

[PCMAnalyst]

The price is going up and down inside a consolidation area in the H1 TF. We expect it to have a trendy move by getting out of this area.

[PCMAnalyst]

The price is going up and down inside a consolidation area in the H1 TF. We expect it to have a trendy move by getting out of this area.

more....

[PCMAnalyst]

We can see a reversal performing by the price after an Alt bat harmonic pattern has been formed in the H1 TF. As long as $104 area is not broken above, we will be witnessing a drop

[Samirofi]

Oil Weekly Outlook for October 7-11


The prices of oil (WTI and Brent) bounced back during last week: WTI rose by 1.48%; Brent oil, by 1.01%. As a result, the gap of Brent oil over WTI slightly contracted: The premium ranged between $5.09 and $6.04. According to the latest EIA weekly report, oil stockpiles increased again by 5.03Mb. In the U.S, imports and production rose last week. Refinery inputs declined. Will oil change direction and fall next week? This week, several reports may move the oil market. These items include: Minutes of the FOMC meeting, OPEC monthly report, IEA monthly update, and EIA oil weekly report.


Here is a weekly outlook and analysis for the oil market for October 7^th to October 11^th:


Oil Prices – October


During last week, crude oil price (WTI) rallied by 1.48% and reached by Friday $103.84/b; further, Brent oil also rose by 1.01% to $109.46/b;


In the chart below are the daily shifts in WTI and Brent oil rates during the year (prices are normalized to January 31^st). As seen below, oil prices have bounced back last week.



Premium of Brent over WTI – October


The gap between Brent and WTI oilslightly contracted last week as it ranged between $5.09 and $6.04 per barrel. Moreover, during the week, the premium slipped by $0.14 per barrel.



Oil Stockpiles, Demand and Supply

The oil stockpiles rose by 5.03 MB and reached 1,821.7 million barrels. The linear correlation between the changes in stockpiles has remained stable at -0.195: this correlation implies that oil price, assuming all things equal, may fall next week. But in order to better understand the developments in fundamentals let’s also look at the changes in supply and demand:

Supply: Oil imports slightly rose by 0.3% last week. The weekly changes in oil imports have a mid-strong negative correlation (-0.211) that suggests oil price may decline next week. Moreover, oil production also rose by 0.5%;

Demand: Refinery inputs declined by 0.8% last week. In total the demand remained higher than the supply; furthermore, the gap has contracted – this may pressure down oil prices as the oil market in the U.S will further loosen.

The chart below shows the shifts in the gap between supply and demand (below zero: Demand is above Supply; above zero: Supply is above Demand).



As seen above, the looser oil market in the U.S coincided with the decline of oil price in recent weeks.

The next weekly update will come out on Wednesday, October 9thand will refer to the week ending on October 4th.


OPEC Monthly Report

The OPEC report will present the main changes in crude oil and natural gas’s supply and demand worldwide; the report will also refer to the shifts in the production of OPEC countries during September 2013; this news may affect oil prices. This report could also show any changes in Libya’s oil exports, which have substantially declined in recent months.

The next report will be published on Thursday, October 10th.


IEA Monthly Report

This upcoming monthly report will present an updated (for September) outlook and analysis for the global crude oil and natural gas market for 2013and 2014.

The next report will come out on Friday, October 11th.


Oil Related News for the Week

Here are several news items that could influence oil investors:

Tuesday – German Factory Orders: The upcoming report will refer to September 2013. In the last update, the factory orders fell by 2.7% during August;

Wednesday – Minutes of the last FOMC Meeting: In the September FOMC meeting the Fed surprised the markets as it had decided to keep its monetary policy unchanged and not to taper its QE3 program. The no-tapering decision had short term effect on the prices of gold and silver but the in the bonds market long term treasuries rates fell down. Some suspect the decision was close and could have gone in the other direction (i.e. tapering QE3). The forthcoming minutes might offer some additional information behind the Fed’s recent decision and how close the decision was. This could also offer some perceptive behind the next two FOMC meetings. This report could affect commodities markets;

Friday – China’s Trade Balance: According to the latest monthly report, China’s trade balance rose to a $28.5 billion surplus; if the surplus further rises, it could indicate China’s economy is improving and thus may positively affect commodities;


Oil Forecast and Breakdown

From the supply side, the rise in oil imports and production led to expansion in supply. From the demand side, refinery inputs decreased again. In total, the gap between supply and demand has contracted, which could suggest the oil market is loosening. Moreover, the gap is also very low compared to its state a few months back. Looking forward, the upcoming Europe, U.S and China’s reports could offer some additional insight regarding the potential developments in demand for oil. These reports include German factory orders, and China’s trade balance. If these reports exceed expectations, they may pull up oil prices. The minutes of the FOMC meeting could affect oil price via the potential changes in the USD. The gap between Brent and WTI may remain around the $4-$6 until new developments in the Middle East or Libya will unfold. Finally, the fundamentals suggest oil prices should further fall in the mid-term as long as tensions in the Middle East are under control and the gap between supply and demand doesn’t rise.

The bottom line, on a weekly scale, I guess oil price will resume its downward trend.

[PCMAnalyst]

We can see a reversal performing by the price after an Alt bat harmonic pattern has been formed in the H1 TF. As long as $104 area is not broken above, we will be witnessing a drop