Here’s the key factor pushing oil prices to $35 a barrel

Here’s the key factor pushing oil prices to $35 a barrel

Here’s the key factor pushing oil prices to $35 a barrel

Here’s the key factor pushing oil prices to $35 a barrel

After enjoying a stellar run-up, crude futures are headed south again, treading into bear-market territory. However, the fundamentals of supply and demand may not be the key reason behind the recent bout of weakness in crude futures.

U.S. benchmark oil, West Texas Intermediate trading on the New York Mercantile Exchange CLU6, -0.95% has lost nearly 15% of its value so far in July, as of Thursday.
300x250 new sheriff en 08.10.2014
Back on June 8, WTI had nearly doubled its value closing at a 2016 high of $51.23 a barrel after reaching a low of $26.21 on Feb. 11. On Friday, crude slipped more than 20% below its June peak, below $41 a barrel officially pushing it into a fresh bear market—defined as a decline of at least 20% from a recent high.

What a difference seven weeks can make.

The pivot lower has industry specialists like those at Morgan Stanley pointing to “worrisome trends” and forecasting crude prices to resume a fresh decline—possibly to as low as $35 a barrel for the second half of 2016.

Morgan Stanley points out that one of key issues for crude is a severe oversupply of refined products from crude, namely gasoline, while demand is waning. “Refined product glut and market share battle will weigh on crude oil. An overcorrection in crude oil demand from refiners is needed to clear product market overhangs,” researchers at Morgan Stanley, led by economist Adam Longson, wrote.

New Zealand’s S&P/NZX 50 Index slipped, falling 0.1 percent as of 8:57 a.m. Tokyo time, with the first major stock gauge to start trading each on track for a fifth straight weekly advance, its longest rally since April.

Yen Spike Sinks Nikkei 225 Futures on BOJ Day; Oil Extends Slump

Yen Spike Sinks Nikkei 225 Futures on BOJ Day; Oil Extends Slump

New Zealand’s S&P/NZX 50 Index slipped, falling 0.1 percent as of 8:57 a.m. Tokyo time, with the first major stock gauge to start trading each on track for a fifth straight weekly advance, its longest rally since April.

Yen Spike The yen jumped, weighing on Tokyo equity-index futures, amid jittery trade ahead of Friday’s much-anticipated policy review from the Bank of Japan. Oil was on track for its third weekly decline in a month. Futures on Japan’s Nikkei 225 Stock Average slipped 0.2 percent in Chicago as the yen spiked up as much as 1.8 percent in early trading, amid the countdown to the BOJ. New Zealand’s dollar also rallied, while U.S. crude extended losses into a seventh straight day, trading around a three-month low amid concern over rising supplies of the commodity. Futures on stock indexes in Australia signaled gains, while those on Hong Kong’s benchmarks

Currencies from the yen to the pound have been whipsawed this week amid speculation over stimulus moves from central banks. Traders will get more intelligence over the next 24 hours, with Japanese policy makers expected to expand their already unprecedented support program and Europe to release results of the latest stress tests for banks. Investors will also get a first read on U.S. gross domestic product in the second quarter later on Friday.

 

“Expectations are widespread that the BOJ will deliver a reasonably comprehensive easing, possibly including additional rate cuts and more quantitative easing,” Cameron Bagrie, chief economist in Wellington at ANZ Bank New Zealand Ltd., said in a note to clients. “Crucial to how the yen responds will be the response in bank stocks.”

Japan releases a bunch of economic data ahead of the policy decision, with the CPI and industrial production numbers to be followed by retail sales and housing starts.Taiwan also reports on GDP Friday, Australia issues data on producer prices, Singapore updates on money supply and Thailand reports on trade.

New Zealand’s S&P/NZX 50 Index slipped, falling 0.1 percent as of 8:57 a.m. Tokyo time, with the first major stock gauge to start trading each on track for a fifth straight weekly advance, its longest rally since April.

… (full story)

Oil prices fell to three-month lows on Thursday as producers continued to pump more than needed, filling inventories, and economic growth prospects darkened. Brent crude oil was down 50 cents at $42.97 a barrel by 1010 GMT, after touching $42.88, its lowest since April 20. U.S. light crude was down 20 cents at $41.72. U.S. government data on Wednesday revealed a surprise rise in crude and gasoline inventories. The build added to an already huge global refined product glut just as slowing economic growth dents the demand outlook. "U.S. commercial stocks are a good reflection of the oversupplied nature of the global oil market," said Tamas Varga, lead oil analyst at London brokerage PVM Oil Associates. Oil markets have been dogged by oversupply for the last two years and fell by as much as 70 percent between 2014 and early 2016, when Brent hit the lowest in more than a decade at around $27 per barrel. Markets have since recovered some ground but oil remains very weak and low refining margins are hurting energy companies. Energy major Royal Dutch Shell reported a more than 70 percent fall in quarterly profit on Thursday, well below analysts' estimates, as weak oil and gas prices further ate into revenue. Shell's net income came in at $1 billion in the second quarter, compared with expectations of $2.2 billion and $3.8 billion achieved in the same period last year.

Oil hits 3-month lows below $43 as oversupply weighs

Oil hits 3-month lows below $43 as oversupply weighs

 Oil prices fell to three-month lows on Thursday as producers continued to pump more than needed, filling inventories, and economic growth prospects darkened. Brent crude oil was down 50 cents at $42.97 a barrel by 1010 GMT, after touching $42.88, its lowest since April 20. U.S. light crude was down 20 cents at $41.72. U.S. government data on Wednesday revealed a surprise rise in crude and gasoline inventories. The build added to an already huge global refined product glut just as slowing economic growth dents the demand outlook. "U.S. commercial stocks are a good reflection of the oversupplied nature of the global oil market," said Tamas Varga, lead oil analyst at London brokerage PVM Oil Associates. Oil markets have been dogged by oversupply for the last two years and fell by as much as 70 percent between 2014 and early 2016, when Brent hit the lowest in more than a decade at around $27 per barrel. Markets have since recovered some ground but oil remains very weak and low refining margins are hurting energy companies. Energy major Royal Dutch Shell reported a more than 70 percent fall in quarterly profit on Thursday, well below analysts' estimates, as weak oil and gas prices further ate into revenue. Shell's net income came in at $1 billion in the second quarter, compared with expectations of $2.2 billion and $3.8 billion achieved in the same period last year.

oversupply weighs Oil prices fell to three-month lows on Thursday as producers continued to pump more than needed, filling inventories, and economic growth prospects darkened.

Brent crude oil was down 50 cents at $42.97 a barrel by 1010 GMT, after touching $42.88, its lowest since April 20. U.S. light crude was down 20 cents at $41.72.

U.S. government data on Wednesday revealed a surprise rise in crude and gasoline inventories. The build added to an already huge global refined product glut just as slowing economic growth dents the demand outlook.

“U.S. commercial stocks are a good reflection of the oversupplied nature of the global oil market,” said Tamas Varga, lead oil analyst at London brokerage PVM Oil Associates.

Oil markets have been dogged by oversupply for the last two years and fell by as much as 70 percent between 2014 and early 2016, when Brent hit the lowest in more than a decade at around $27 per barrel.

Markets have since recovered some ground but oil remains very weak and low refining margins are hurting energy companies.

Energy major Royal Dutch Shell reported a more than 70 percent fall in quarterly profit on Thursday, well below analysts’ estimates, as weak oil and gas prices further ate into revenue.

Shell’s net income came in at $1 billion in the second quarter, compared with expectations of $2.2 billion and $3.8 billion achieved in the same period last year.

Oil, stocks sink Monday as DNC scandal fest opens in Philly

WASHINGTON, July 25, 2016 – Oil, stocks sink Halfway through 2016, we’re getting to the point where domestic and international politics plus reality on the ground are all itching to gang tackle and crush Wall Street’s surprising summer rally. Market averages have been hovering in the red zone nearly all of Monday, and at 2:30 p.m. EDT, the three… Continue reading “Oil, stocks sink Monday as DNC scandal fest opens in Philly”

Brent Oil Prices Extend Declines Following Range Break

Brent Oil Prices Extend Declines Following Range Break

Brent Oil Prices Extend Declines Following Range Break

Investors Buz  –  Global Markets Roundup

Brent Oil Prices Extend Declines Following Range Break

Brent crude oil prices (UKOIL) tumbled on Monday, following a range break on Friday. Selling pressure started in early Asian trading, while a break lower was triggered in early North American trading that sent the instrument to 10-week lows. UKOIL was last seen at $44.83 for a decline of 1.87% on the day. Brent oil prices fell into a range in the second week of July, and have been trading in a broader zone between $46.00 and $48.50, while a declining trendline has capped rallies ahead of the upper range bound. A break lower from the two-week range was seen on Friday, and a recovery attempt from this week’s open failed ahead of the
300x300 top%20traders%20team en
The broader technical break initially occurred on July 7 when a rising channel from January lows broke down. The break set a bearish tone for oil prices, and a second break from the range seen on Friday carries potential to take prices back to the 200 period daily moving average found at $42.39. Near-term support is seen at $44.43, the level served as resistance in mid-April, and support in late April.

The acceleration in momentum suggests that any recoveries will be limited. The previous range should cap any rallies at $45.88, and while below the price point, there is a clear bearish bias for oil prices.

… (full story)

USDCAD Breakout Potential Persists as Crude Oil Breaks Down

USDCAD Breakout Potential Persists as Crude Oil Breaks Down

Investors Buz  –  Global Markets Roundup 

 

USDCAD Breakout Once again last week, USD/CAD failed to close through the key C$1.3145 level, despite the first test of levels above since the middle of May. For one, the market seems to be shaking off the surprising bout of Canadian economic data at the end of last week. Instead, there are two drivers in play right now: rising Fed rate expectations; and falling Crude Oil prices. With Fed funds futures contracts implying June 2017 as the most likely period for the Fed’s first rate hike, there has been a material shift forward from pricing pre-NFPs. Inherently, this has translated into broad support for the US Dollar. Concurrently, as the greenback has
300x250 top%20traders%20team en
As Crude Oil gathers pace below $44.40, its bearish momentum structure has solidified on the H4 timeframe. Price remains below its 8-, 21-, and 34-EMAs, while Slow Stochastics and MACD continue to trend lower in bearish territory. A move to the May 9 low of $43.03 over the coming sessions is increasingly possible. Accordingly, the recent breakdown in Crude Oil technicals fits neatly with the bullish technical structure of USD/CAD (chart 2 below).

Chart 2: USD/CAD Daily Chart (March to July 2016)

USD/CAD Breakout

The case for a USD/CAD breakout through C$1.3145 remains valid, particularly as Crude Oil slips lower. The short-term bearish momentum structure in Crude Oil is matched by USD/CAD’s more intermediate bullish technicals: price is above its 8-, 21-, 34-EMAs on the daily chart; and Slow Stochastics and MACD are trending higher in their respective bullish territories.

True, the relationship between the Canadian Dollar and Crude Oil has weakened a bit in recent weeks (chart 3 above), but much of this has to do with the Brexit-related shock after June 24. Instead, with the 20-day correlation steadying above +0.60, we still believe there is strong evidence that what’s bad for Crude Oil will ultimately be bad for the Canadian Dollar.

… (full story)

Libya oil exports threatened as NOC warns against port deal

Libya oil exports threatened as NOC warns against port deal

Libya oil exports threatened as NOC warns against port deal

Investors Buz  –  Global Markets Roundup

Libya oil exports threatened as NOC warns against port deal

Reuters published an article over the weekend, citing that Libya’s oil exports have come under serious threat after the Libyan oil company objected a port deal.

Key Headlines:

“Libya’s hopes to boost crude exports have been dealt a blow after the head of the National Oil Corporation (NOC) objected to a deal between the government and local guards to reopen key ports.”

 

“In a letter seen by Reuters to U.N. Libya envoy Martin Kobler and a number of oil and diplomatic officials, NOC chairman Mustafa Sanalla said it was a mistake to reward Ibrahim Jathran, head of the Petroleum Facilities Guard (PFG), for a blockade of the oil ports of Ras Lanuf, Es Sider and Zueitina.”

Forex, Stock Indices, Oil, Gold and CFDs by XM (XM.COM)

Forex, Stock Indices, Oil, Gold and CFDs by XM (XM.COM)

Forex, Stock Indices, Oil, Gold and CFDs by XM (XM.COM)

Ivestors Buz  –  Global Markets Roundup

Forex, Stock Indices, Oil, Gold and CFDs by XM <span data-recalc-dims=(XM.COM)" width="300" height="187" srcset="https://i0.wp.com/investorsbuz.com/wp-content/uploads/2016/07/XM.jpg?resize=300%2C187 300w, https://i0.wp.com/investorsbuz.com/wp-content/uploads/2016/07/XM.jpg?w=550 550w" sizes="(max-width: 300px) 100vw, 300px" />

Forex, Stock Indices

We offer a range of over 60 currency pairs, precious metals, energies and equity indices with the most competitive spreads and with the legendary no re-quotes execution of XM.

In addition our range of MT4 Mobile applications for both Apple and Android Operating Systems will seamlessly allow you to access and trade your account from your smartphone or tablet with full account functionality.

Our Research and Education center offers daily updates on all the major trading sessions along with multiple daily briefings on all critical market events which daily shape the global markets.

Manned by 20 multilingual market professionals we present a diversified educational knowledge base to empower our customers with a competitive advantage.

At XM we offer both Micro and Standard Accounts that can match the needs of novice and experienced traders with flexible trading conditions and leverage up to 888:1.  Forex, Stock Indices