By FXEmpire.com

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

The Strategic Petroleum Reserve is 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

Most commonly traded is the NYMEX where you find West Texas Crude. It is also traded in USD.

Weekly Analysis and Recommendation:

Crude Oil has fallen this week to trade at 95.65 falling from a high of 106.00 just a week ago. A combination of weak eco data and very high inventory reports and OPEC supply and production has seen crude continue to decline all week.

On the commodity front, Euro zone crisis has taken the center stage once again. Slowdown issues have moved from the back burner of the market place to the front burner. We have seen steep corrections coming out in commodities in past few trading sessions. The greenback has benefited recently on fresh safe-haven demand due to the EU situation and now is trading above the level of 80. If it sustains above this level, then commodities may correct further. Fresh weakness in export activities in China is another major concern for the market. Bundles of important economic data such as GDP data of Germany, Euro zone and Japan, German Zew Survey, CPI and advance retail sales data of US, jobless claim data of UK, CPI of Euro zone and Canada, Minutes of FOMC meet will keep the investors on toes this week.

In the early 2012, US imposed various sanctions against Iran for developing nuclear weapons. US also pressurized major consumers of Iranian oil to cut down their imports by almost 20% or more. This eventually spurred supply concerns across the globe for oil. EU nations which consume almost 20% of Iranian oil also agreed on 23rd Jan’12 to put an embargo on Iran oil exports. In this agreement, they formally adopted to completely ban the imports of Iranian oil and its products from 1st July 2012.

However, on the other side the supply from the OPEC nations reached to the highest level to offset the loss of oil from Iran, Qatar, Sudan, Kuwait and Syria. Any ease over the supply concerns from Iran may result into further fall in the oil prices.

Presently, the Crude oil market is over supplied as the global supply is outpacing the demand. It is expected that the world will consume around 88.7 mbpd this year which is almost 1% higher than in 2011. However, the supply will remain around 89.08 mbpd leaving the market in surplus of around 30-40,000 bpd.

Until there is some resolution in Greece and not until the ultimate meeting due this coming week between France’s new president and German Chancellor Merkel, will the EU politics allow the euro to gather any strength. With Spain boiling over, markets are worried about the future direction of the EU.

Historical:

High: 114.57

Low: 76.84

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

May 14

07:00

EUR

Finnish CPI (YoY)

2.90%

08:15

CHF

PPI (MoM)

0.3%

08:30

EUR

Dutch Retail Sales (YoY)

0.90%

10:00

EUR

Industrial Production (MoM)

-0.2%

0.5%

May 15

06:30

EUR

French CPI (MoM)

0.8%

07:45

EUR

French Non-Farm Payrolls (QoQ)

-0.1%

09:30

GBP

Trade Balance

-8.8B

May 16

09:30

GBP

Average Earnings Index +Bonus

1.1%

09:30

GBP

Claimant Count Change

3.6K

10:00

EUR

CPI (YoY)

2.6%

2.6%

10:00

EUR

Core CPI (YoY)

1.6%

11:00

EUR

Portuguese Unemployment Rate

14.00%

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