Crude Oil Weekly Forecast December 12-16, 2011, Fundamental Analysis
Crude oil prices declined last week amid high level of uncertainty that is surrounding the outlook of the European debt crisis with mounting fears the European debt crisis is worsening, raising fears that the debt crisis is spreading into major economies within the euro zone area.
Meanwhile, economic data from the United States basically showed better than expected performance, where the services sector activities continued to expand in November, while Chicago PMI rose above forecasts in November, which eased some of the concerns in markets over the outlook for growth in the world’s largest economy. Nonetheless, the huge pessimism from Europe remained the dominant theme around global financial markets.
Important data will be released from Europe and the United States next week, where investors will look up to the finalizing process of European nations as they deeply battle their debt crisis. We expect volatility to persist through the sessions this week, especially when eyes focused on the European bond auctions, while the Federal Open Market Committee (FOMC) rate decision will highlight this week, where the Federal Reserve is expected to leave the rates unchanged especially when improvement is seen in the United States economy.
Our overall outlook for crude oil prices is somewhat neutral with a downside tendency, as the outlook for global growth is worsening due to mounting concerns from Europe and the fact that major economies around the globe are still weak, and that should put negative pressure on crude oil prices. Nonetheless, if the outlook for global growth improves, crude oil prices are likely to rise in that case.
Highlights for this week that will probably affect Crude Oil direction are:
Monday December 12:
The United States will start this week at 19:00 GMT with the monthly budget statement for November, where the budget deficit could have narrowed to $140.0 billion from $150.4 billion.
Tuesday December 13:
The United States will join the session at 13:30 GMT with the retail sales index for November, where the advance retail sales index could have expanded by 0.6% from 0.5%, while the retail sales less Autos index could have advanced by 0.5% from 0.6%.
At 15:00 GMT the United States will provide the business inventories index for October, which could have improved 0.4% from the previous steady reading.
At 19:15 GMT the Federal Open Market Committee (FOMC) will announce the rate decision (DEC 13), with expectations the Federal Bank could have left rates unchanged at 0.25%.
Wednesday December 14:
The United States will join the session at 13:30 GMT with the import price index for November, where the monthly index is expected to expand by 1.0% from the previous drop of 0.6%, while the annual index previous reading was 11.0%.
At 15:30 GMT, the EIA report for crude oil inventories will be released for the week ending December 09, where last week crude oil inventories increased by 1.3 million barrels.
Thursday December 15:
The United States will join the session at 13:30 GMT with the producer price index for November, where the monthly PPI index is expected to expand by 0.2% from the previous drop of 0.3%, while the PPI excluding food and energy monthly index could have expanded by 0.2% from the previous steady reading, in the time the annual PPI index could have remained unchanged at 5.9%, and finally the annual PPI excluding food and energy could have lingered at 2.8%.
The United States will also release the Empire manufacturing index for December, which could have improved to 2.50 from 0.61.
Furthermore, the United States will also provide the initial jobless claims figure (DEC 10), which could have inclined to 390 thousand claims from 381 thousands.
At 14:00 GMT the United States will return with the TIC flows for October, where the net long-term TIC flows previous reading was $68.6 billion, while the total net TIC flows previous reading was 57.4 billion.
At 14:15 GMT the United States will release the Industrial production index for November, where the industrial production index could have expanded by 0.2% from 0.7%, while the capacity utilization index could improve to 77.9% from 77.8%.
At 15:00 GMT the United States will provide markets with the Philadelphia Federal District indicator, which could have improved to 5.0 from 3.6.
Friday December 16:
The United States will join the session at 13:30 GMT with the consumer price index for November, where the monthly index could have expanded by 0.1% from the prior drop of 0.1%, while the CPI excluding food and energy monthly index could have also improved by 0.1% from 0.1%, in the time the annual consumer price index is expected to remain unchanged at 3.5%, and finally the CPI excluding food and energy annual index is also projected to linger at 2.1%.
Originally posted here
