Crude Oil Weekly Fundamental Analysis April 2-6, 2012, Forecast

By FXEmpire.com

Introduction: Crude Oil is considered the king of the commodities markets.

The Strategic Petroleum Reserveis the United States’ emergency oil stockpile, and it is the largest emergency petroleum supply in the world. The reserve stores about 570 million barrels of crude oil in underground salt caverns at four sites along the Gulf of Mexico. Any dipping into this reserve is going to be big news.

Brent Crude is traded in London as something called Futures contracts, which are priced in US Dollars. Now, all you traders brave enough to run your positions over a period of days or weeks, pay attention here
And finally the most specific economic data to focus on are the US weekly oil and gas inventory figures, issued by the Energy Information Administration and released every week on Wednesday afternoons. If you trade oil you can’t afford to miss these.

Analysis and Recommendation:

Crude Oil ended the month at 102.97 having fallen from the earlier high of 107.71

After price had suffered a disconnect between supply and demand and was being driven up by speculators, a global effort was launched to move the traders out of the markets. All week Saudi and OPEC officials made public addresses assuring the markets that there would be more than enough supply. When this did not work rumors and stories began to surface about talks regarding the release of international strategic reserves to flood the markets. Markets slowly reacted more on the basis of higher than expected inventories when the EIA released its weekly reports.

A French government official leaked information on a coordinated effort between the UK, the UK and France. Today, French Prime Minister Francois Fillon on said he was optimistic about prospects for an agreement between the U.S. and Europe on the release of oil stockpiles, news reports said. “If we agree with the other developed countries, we can, by withdrawing part of our stocks, push (oil) prices in a limited way,” On Friday, French President Sarkozy, publicly announced that agreements were being made to release the reserves and that France was supportive of these measures.

Oil slowly began to drop in price as investors realized that they had overstayed their welcome and there was a good chance that they would not be able to get out once reserves were released.

This week’s inventory was a surprise to the markets.

U.S. crude oil refinery inputs averaged just less than 14.5 million barrels per day during the week including March 23, 88 thousand barrels per day above the previous week’s average. Refineries operated at 84.5 percent of their operable capacity last week. Gasoline production decreased slightly last week, averaging about 8.8 million barrels per day. Distillate fuel production increased last week, averaging nearly 4.3 million barrels per day.

U.S. crude oil imports averaged about 9.3 million barrels per day last week, up by 1.0 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 8.7 million barrels per day, 44 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 564 thousand barrels per day. Distillate fuel imports averaged 165 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.1 million barrels from the previous week. At 353.4 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year.

Economic Reports March 25-30, 2012 that affect the Americas actual v. forecast

USD	Fed Chairman Bernanke Speaks
USD	Pending Home Sales (MoM)	-0.5%	1.0%	2.0%
CAD	BoC Gov Carney Speaks
USD	CB Consumer Confidence	70.2	70.3	71.6
USD	Fed Chairman Bernanke Speaks
USD	FOMC Member Fisher Speaks
USD	Durable Goods Orders (MoM)	2.2%	3.0%	-3.6%
USD	Core Durable Goods Orders (MoM)	1.6%	1.5%	-3.0%
USD	Continuing Jobless Claims	3340K	3365K	3381K
USD	GDP (QoQ)	3.0%	3.0%	3.0%
USD	Initial Jobless Claims	359K	350K	364K
USD	GDP Price Index (QoQ)	0.9%	0.9%	0.9%
USD	Fed Chairman Bernanke Speaks
USD	Personal Spending (MoM)	0.8%	0.6%	0.4%
CAD	GDP (MoM)	0.1%	0.1%	0.5%
USD	Core PCE Price Index (MoM)	0.1%	0.1%	0.2%
USD	Chicago PMI	62.2	63.1	64.0
USD	Michigan Consumer Sentiment Index	76.2	75.1	74.3

Last week’s market highlights

The Good Stuff

• Eurozone Finance Ministers finalizes the temporary combination of the EFSF and ESM. Italy and Spain get to contribute to their own bailout fund if needed
• German unemployment falls more than expected and rate falls to lowest since reunification
• German IFO business confidence up slightly to the highest since July
• Italian business confidence up slightly from lowest since Dec ’09 and consumer confidence rises to 8 month high
• Consumer confidence rises a touch to best since Feb ’11
• Personal Spending in Feb rises .8% m/o/m, above estimates of up .6%
• UK said purchase apps rose 3.3% to a 10 week high.
• Crude finally drops but not enough

The Disappointing

• Inflation expectations in both the Michigan (3.9%) and Conference Board (6.3%)confidence figures rise to the highest since May,
• Chicago, Richmond, Dallas and KC manufacturing survey’s all fall more than expected in Mar from Feb
• Real income falls in Feb by .1%, savings rate drops to 3.7%, the lowest since Aug ’09
• Initial Jobless Claims 4 week avg 365k after benchmark revisions vs 355k prior
• Feb Durable Goods orders grow less than expected after Jan’s weakness
• UK said refinances fell 4.6% to lowest since early Dec
• Home price index falls to cheapest since Jan ’03
• Pending Home Sales in Feb unexpectedly falls .5% but from most since Apr ’10
• German retail sales in Feb fall for 4th month in past 5
• Shanghai index closes down for the 3rd straight week due to continued concerns with economic growth
• Bernanke Feds will do more, possible monetary easing
• Gasoline prices rise another .035 on the week to $3.93.

Economic Highlights of the coming week that affect the Euro, the USD and the Franc.

Apr. 02	08:15	CHF	Retail Sales (YoY)	-14.8B
08:30	CHF	SVME PMI
08:50	EUR	French Manufacturing PMI
08:55	EUR	German Manufacturing PMI
09:00	EUR	Manufacturing PMI
10:00	EUR	Unemployment Rate
15:00	USD	ISM Manufacturing Index
Apr. 03	10:00	EUR	GDP (QoQ)
19:00	USD	FOMC Meeting Minutes
Apr. 04	10:00	EUR	Retail Sales (MoM)
11:00	EUR	German Factory Orders (MoM)
12:45	EUR	Interest Rate Decision
13:15	USD	ADP Nonfarm Employment Change
13:30	EUR	ECB Press Conference
15:00	USD	ISM Non-Manufacturing Index
Apr. 05	08:15	CHF	CPI (MoM)
13:30	USD	Initial Jobless Claims
13:30	USD	Continuing Jobless Claims
Apr. 06	13:30	USD	Average Hourly Earnings (MoM)
13:30	USD	Nonfarm Payrolls
13:30	USD	Unemployment Rate
13:30	USD	Private Nonfarm Payrolls

Summary of this week’s highlights for the European and US Markets

In the United Kingdom, the March purchasing manager index for manufacturing is on tap.

The same release is due in Europe for the European Monetary Union.

EU unemployment rate data for February will also be released.

PMI construction data for March is awaited in the UK, along with the BRC shop price index for the month.

EU producer price index data is also due.

In the UK, the March purchasing manager index for services is expected to be released.

The European Central Bank will wrap up a busy day with a meeting to decide on the current level of interest rates in the currency bloc.

Industrial production data for February is due in the UK, along with manufacturing production data for the period.

NIESR will release its quarterly gross domestic product estimate for March.

Elsewhere, the Bank of England will meet to discuss the level of interest rates for March.

This week in the USA

Monday sees the release of the ISM manufacturing index for March in the US. The index is expected to have risen 1.1 points during the month to 53.5.

February construction spending data is also due.

Tuesday brings US car sales data for March, along with factory orders figures for February.

On Wednesday, the ADP employment report for March will be published in the US, alongside the ISM non-manufacturing index for the month.

The weekly Energy Information Administration petroleum status report will also be announced

In the US on Thursday, jobless claims data is awaited.

The March employment situation report is due in the US, along with consumer credit change data for February.

Economists expect the jobs data to show a 230,000 lift in private sector jobs for the month, with total non-farm payrolls lifting by 225,000, leaving the jobless rate unchanged at 8.3 per cent.

On Friday, most western markets will be closed for the Good Friday public holiday.

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. All other PDF and HTML files are released to the Web site after 1:00 p.m. (Eastern Time) on Wednesday. Appendix D is produced during the winter heating season, which extends from October through March of each year. For some weeks which include holidays, releases are delayed by one day. (schedule)

Originally posted here