OIL

[PCMAnalyst]

hi

In this section Daily analysis will be inserted.

[Samirofi]

Crude oil price closed yesterday’s trading with bearish bias heading towards retesting the previously breached resistance which turns into support now at 105.00, where holding above this level is considered as the most important factor for the continuation of our overall positive expectations. You must be aware that surpassing 107.15 is required to confirm nonexistence of a bearish technical pattern which is a double top formation, where the completion of this pattern will lead to an intraday decline that its targets reach towards 101.00 Expected trading range for today is between 104.30 support and 108.00 resistance. Expected trend for today: Bullish

[Samirofi]

Crude Oil inside a continuation pattern 18/07/2013



Crude oil price continued its positive trading yesterday, and we notice that the trading is limited inside a continuation symmetrical triangle pattern, which means that breaching its resistance at 106.45 will provide a solid positive motive that supports the continuation of the bullish trend.

Therefore, we continue in preferring the bullish trend on the intraday and short term basis, and the targets begin at 107.15 and extend towards 109.00, while achieving them requires holding above 105.00

Expected trading range for today is between 105.00 support and 108.00 resistance.

Expected trend for today: Bullish

[Samirofi]

Oil Weekly Outlook for July 22-26

July 22, 2013


The price of oil (WTI) rallied again during last week: WTI rose by 1.81%; Brent oil, on the other hand, slightly decreased by 0.68%. As a result, the premium of Brent oil over WTI plummeted; the premium ranged between $0.2 and $4. Based on the latest EIA weekly report, oil stockpiles slightly declined by 0.2Mb. In the U.S, refinery inputs and production rose while imports sharply fell during last week. The situation in Egypt hasn’t improved and is keeping the price of oil and its volatility high. Will oil continue to pull up next week? This week, several reports may affect the oil market. These items include: China’s manufacturing PMI, U.S durable goods, and EIA oil weekly update.

Here is a weekly outlook and analysis for the crude oil market for July 22^nd to July 26^th:

Oil Prices – July

During last week, crude oil price (WTI) rose by 2.64% and reached by Friday $105.95/b; further, Brent oil also increased by 1.01% to $108.81/b;

In the chart below are the changes in WTI and Brent oil rate in the past several months (prices are normalized to January 31^st). As seen in the chart herein, the oil have traded up in the past several of weeks.




Premium of Brent over WTI – July

The difference between Brent and WTI spot oilsharplycontracted again as it ranged between $0.2 and $4 per barrel. During July, the premium tumbled down by 96.43%. This is the lowest gap recorded between Brent and WTI since November 2010.




Oil Stockpiles – Slipped by 0.2Mb

The oil stockpiles slightly declined by 0.2 MB and reached 1,817.8 million barrels. The linear correlation between the changes in stockpiles has slightly strengthened to -0.203: this relation suggests that oil price, assuming all things equal, will continue to rise next week.

Oil imports to the U.S sharply fell by 2.3% last week. The weekly changes in oil imports have a mid-strong negative correlation (-0.276) that suggests oil prices may increase again next week. Conversely, oil production and refinery inputs rose last week. In other words, the rise in production and refinery inputs might loosen the U.S oil market and thus curb the rally of oil prices.

The next weekly report will come out on Wednesday, July 24^th and will refer to the week ending on July 19^th.

Egypt Riots and Oil

The ongoing riots in Egypt could be among the factors contributing to the high oil price. The main concern revolves the potential blockage of the Suez Canal, in which nearly 3.8 million barrels per day transport through it. Keep in mind, in 2011 Arab spring that also erupted in Egypt, the Suez Canal remained open. Therefore, the current developments in Egypt are less likely to affect the shipment of oil via the Suez Canal.

Oil Related News for the Week

Tuesday – China flash Manufacturing PMI: in the previous survey regarding June the Manufacturing PMI declined again to 48.3; this index indicates China’s manufacturing sectors have contracted at a slightly faster pace than in May; if the index will continue to contract, this may adversely affect oil prices;

Thursday – U.S Core Durable Goods: This monthly report may indirectly indicate the changes in U.S. demand for commodities such as oil and gas. As of May 2013, new orders of manufactured durable goods increased to $231 billion; if this report will show another rise in new orders then it could pull up oil prices;

Oil Price Forecast and Analysis

From the supply side, the ongoing drop in imports could positively affect oil price. Conversely, the ongoing increase in production and refinery inputs may curb the recent rally of oil prices. The recent slight drop in U.S storage is another indication for a slight decline in supply or a moderate rise in demand, which could also suggest that the U.S. oil market has slightly tightening. From the demand side, the recovery of the U.S economy may positively affect oil prices. The upcoming reports including core durable goods could signal additional growth in demand for oil via the rise in U.S economic activity. The situation in Egypt is likely to keep the volatility of oil prices high. If the situation will cool down, oil prices’ rally might reach a halt and perhaps even drop. Finally, the closing of the gap between Brent and WTI in recent week may imply the tightening of the U.S oil market compared to the Europe nearly eliminated this premium. The low premium is likely to remain at its current range.

The bottom line, on a weekly scale I guess oil price will continue to rise.

[Samirofi]

Crude Oil breaks the support levels 25/07/2013



Crude oil price declined strongly yesterday and settled below 106.00, to stop the bullish trend scenario which was suggested in our recent reports, and a possible intraday turn into the downside appears.

Now, we need to stop aside temporarily, to be sure of the price behavior according to 106.20 resistance and 104.15 support, as breaching one of them will provide clearer signals for the next intraday and short term track.

Expected trading range for today is between 104.00 support and 107.00 resistance.

Expected trend for today: Neutral

[Samirofi]

Crude heads for weekly loss on higher production levels, China slowdown

Despite signs of economic growth in the US, the world’s biggest oil consumer, crude oil is heading for its first weekly decline in more than a month as the rising crude production showed supplies are abundant, weighing on prices.

The Energy Information Administration showed on Wednesday that crude production rose to 7.56 million barrels a day last week, the most since December 1990, making the market well supplied during the summer driving season.

Also dragging prices lower is the economic slowdown in China, the world’s second biggest oil consumer. Data showed this week that China`s manufacturing activity hit an 11-month low in July and its job market weakened. “The market is focused on demand rather than supply. The weaker PMI numbers out of China… is contributing to that weakness, keeping prices under a little bit of pressure”, said Natalie Rampono.

- Crude is trading around $104.79 a barrel after falling $0.71
- Brent is trading around $107.26 a barrel after falling $0.39

Losses however were limited on Thursday as the US dollar weakened, hovering near a more than one-month low against a basket of major currencies, increasing the appeal of the dollar dominated commodities such as oil.

Crude oil’s movement may be limited until next week when the US Federal Reserve will meet to decide on its monetary policy. The meeting may provide clues on when the US will start trimming its stimulus, a move that may tighten liquidity and boost the dollar. Meanwhile, supply disruptions in the North Sea, Middle East and Africa are underpinning oil prices.

The North Sea`s Forties pipeline has cut pumping rates because of maintenance while Iraq’s crude exports will be cut in September also due to maintenance at ports.

- Natural gas is trading at $3.636 per cubic feet after falling 0.022%
- Gasoline is trading at $3.0238 a gallon after rising 0.23%
- Heating oil is trading at $3.0233 a gallon after falling 0.39%

[Samirofi]

Oil Weekly Outlook for August 5-9


The price of oil (WTI and Brent) bounced back last week: WTI rose by 2.14%; Brent oil, by 1.66%. As a result, the premium of Brent oil over WTI contracted; the premium ranged between $1.65 and $3.83. Based on the recent EIA weekly report, oil stockpiles rose by 1.6Mb. In the U.S, imports and production increased again while refinery inputs declined during last week. Will oil continue to trade up next week? This week, several reports may affect the oil market. These items include: China’s new loans, OPEC monthly report, American trade balance, and EIA oil weekly report.


Oil Prices – August


During last week, crude oil price (WTI) rose by 2.14% and reached by Friday $105.50/b; further, Brent oil also increased by 1.66% to $108.11/b;


In the chart below are the changes in WTI and Brent oil prices in recent months (prices are normalized to January 31^st). As seen in the chart herein, the oil has rallied during most of July.



Premium of Brent over WTI – August


The gap between Brent and WTI spot oil bounced back and rose last week as it ranged between $1.65 and $3.83 per barrel. Nonetheless, during the week, the premium fell by 18.62%.



Oil Stockpiles – Increased by 1.6Mb

The oil stockpiles changed direction and rose by 1.6 MB and reached 1,817.2 million barrels. The linear correlation between the shifts in stockpiles has slightly strengthened to -0.21: this correlation suggests that oil price, assuming all things equal, will fall next week.

Oil imports to the U.S also increased by 2.5% last week. The weekly changes in oil imports have a mid-strong negative correlation (-0.289) that pull down oil price next week. Moreover, oil production rose; refinery inputs decreased again last week. In total, the drop in production and imports might tighten the U.S oil market.

The next weekly report will come out on Wednesday, August 7^thand will refer to the week ending on August 2^nd.

OPEC Monthly Report

The OPEC report will show the main developments in crude oil and natural gas’s global supply and demand; the report will also refer to the changes in the production of OPEC countries during July 2013;

The next report will be published on Friday, August 9^th.

IEA Monthly Report

This upcoming monthly report will present an updated (for July) outlook and analysis for the global crude oil and natural gas market for 2012 and 2013.

The next report will come out on Friday, August 9^th.

Oil Related News for the Week

Monday – Australian Retail Sales: In the previous update, the seasonally adjusted retail sales slightly rose by 0.1% during May; this news may affect the Aussie dollar, which tends to be correlated with oil rates;

Tuesday – Reserve Bank of Australia – Cash Rate Statement: In the latest rate decision of RBA it left the cash rate at 2.75% – its lowest level in years, which contributed to decline of the Aussie dollar. The current expectations are that RBA will cut the interest rate again by 0.25 percentage points, which is likely to keep the Aussie weak against leading currencies;

Tuesday – American Trade Balance: This monthly update for June will show the changes in imports and exports of goods and services to and from the U.S, such as oil and gas; based on the recent American trade balance update regarding May the goods and services deficit expanded to $45 billion;

Wednesday – German Industrial Production: The upcoming report will refer to July 2013. In the last update, the industrial production fell by 1% during June;

Thursday – China Manufacturing PMI: Back in June 2013 the Manufacturing PMI slipped to 50.1 – i.e. China’s manufacturing sectors is still expanding but at a slightly slower pace; the recent flash PMI report was well below the 50 point market. If the index will decrease, this may also adversely affect oil price;

Friday – China New Loans: This report will pertain to the recent developments in China’s new loans. Based on the recent report, the total loans sharply increased rose again; this report is another indicator for China’s economic growth;

Oil Price Forecast and Analysis

From the supply side, the recent rise in production and imports could drag down oil price. Conversely, the moderate decline in refinery inputs may pull up oil price. The recent rise in U.S storage is another indication for a moderate increase in supply or a decrease in demand, which could also suggest that the U.S. oil market has slightly loosened. From the demand side, the upcoming reports including U.S trade balance, China’s new loans and German industrial production could signal the direction of the demand for oil in U.S, Europe and China. If these reports will positively surprise the current market expectations and surpass the current expectations, they could positively affect oil prices. The situation in Egypt is likely to keep the volatility of oil prices high. If the situation will cool down, oil prices might further pull back. Finally, the premium of Brent over WTI remains low and under $5; it is likely to remain at its current range as the U.S oil market further tightens compared to the European market.

The bottom line, on a weekly scale I guess oil price might change direction and slightly fall.

[Samirofi]

Midday update for Crude Oil 05/08/2013



Crude oil trades with clear negative bias approaching the critical support at 105.80, which breaking it represents the key to head towards 102.60

Until now, we are keeping our neutral attitude until confirming breaking the mentioned support or breaching 108.05 resistance.

Expected trading range for today is between 105.00 support and 108.75 resistance.

Expected trend for today: Neutral

[Samirofi]

Crude Oil awaits more targets 08/08/2013



Crude oil price approached 104.00 level yesterday, showing some bullish bias affected by stochastic positivity, while trading remains below the EMA50 which forms a resistance line at 105.65, which keeps the intraday bearish overview valid, and the target is located at 102.65


Breaching above 105.65 will push to visit the upside channel’s resistance at 108.55

Expected trading range for today is between 103.00 support and 106.00 resistance.

Expected trend for today: Bearish

[Samirofi]

Oil Weekly Outlook for August 12-16

The price of oil (WTI and Brent) fell during the first four days of the week only to rally on Friday. Despite the sharp rise on Friday both oil prices fell on a weekly scale: WTI slipped by 0.91%; Brent oil, by 0.67%. As a result, the premium of Brent oil over WTI remained nearly unchanged; the premium ranged between $2.14 and $3.28. Based on the latest EIA weekly report, oil stockpiles rose by 0.75Mb. In the U.S, imports and production rose again while refinery inputs slipped during last week. Will oil resume their upward trend next week? This week, several reports may affect the oil market. These items include: Philly Fed index, retail sales, German economic sentiment, and EIA oil weekly report.


Here is a weekly outlook and analysis for the crude oil market for August 12^th to August 16^th:

Oil Prices – August

During the previous week, crude oil price (WTI) fell by 0.91% and reached by Friday $105.97/b; further, Brent oil also decreased by 0.67% to $108.22/b;

In the chart below are the developments in WTI and Brent oil prices in recent months (prices are normalized to January 31st). As seen in the chart herein, the oil remained nearly unchanged during August




Premium of Brent over WTI – August


The difference between Brent and WTI spot oildidn’t change much last week as it ranged between $2.14 and $3.28 per barrel. Nonetheless, during the week, the premium rose by 11.94%.




Oil Stockpiles – Slightly Rose by 0.75Mb

The oil stockpiles slightly rose by 0.75 MB and reached 1,817.9 million barrels. The linear correlation between the changes in stockpiles has slightly weakened to -0.20: this correlation suggests that oil price, assuming all things equal, will decline next week.

Oil imports to the U.S increased again by 1.2% last week. The weekly changes in oil imports have a mid-strong negative correlation (-0.286) that suggests oil price may decline next week. Moreover, oil production increased; refinery inputs slipped again last week. In total, the rise in production and imports might loosen the U.S oil market.

The next weekly report will come out on Wednesday, August 14thand will refer to the week ending on August 9th.OPEC Monthly Report

According to the recent OPEC Report, OPEC’s oil production slipped again by 97.3 thousand bbl/d to reach 30,308 thousand in July – its lowest level in recent months. This news suggests the oil supply has slightly declined during last month, which could have tightened the oil market. If this trend will persist, it could further pressure up the price of oil.

IEA Monthly Report

Based on the recent monthly update, the global oil supply rose in July by 575 thousand bbl/d to reach 91.85 million bbl/d mainly due to rise in non-OPEC countries’ production. The global demand was little changed in 2013 but for 2014 the projection are for a sharp rise of 1.1 mb/d .

The sharp rise in expected demand for oil in 2014 may have pulled up the price of oil. Global refinery crude demand spiked in June and may have also jumped in July. OECD industry inventories increased by 11.9 mb in June.


Oil Related News for the Week

Tuesday – German ZEW economic sentiment: In June, the ZEW indicator for Germany decreased to 36.3 points; if Germany’s economic sentiment will keep falling, the Euro will plausibly weakened against other currencies including the US dollar;

Tuesday –U.S. Retail Sales Report: In the recent report regarding June, the retail sales rose again by 0.6% from the last month; gasoline stations sales also increased by 0.7% in June compared to May 2013; this report could signal the developments in U.S’s gasoline demand and thus may affect U.S oil prices;

Thursday – Philly Fed Manufacturing Index: This monthly survey estimates the growth of the US manufacturing sectors. In the recent survey regarding July, the growth rate rose again from +12.5 in June to +19.8 in July. If the index will continue to rise, it may positively oil prices (the previous Philly Fed review);

Oil Price Outlook and Analysis

From the supply side, the ongoing rally in production and imports could adversely affect oil price. Conversely, the moderate fall in refinery inputs may pull back up oil price. The U.S oil storage continue to buildup, which servers as another indication for a moderate rise in supply or a decline in demand, which could also suggest that the U.S. oil market has slightly loosened. From the demand side, the upcoming reports including U.S retail sales, Philly Fed survey and German economic sentiment could signal the direction of the demand for oil in U.S and Europe. If these reports will positively surprise the current market expectations and surpass the current expectations, they could positively affect oil prices. Finally, the premium of Brent over WTI is likely to remain under $5.

The bottom line, on a weekly scale I guess oil price might resume its downward trend and slowly decline.


Good Luck