Crude Oil Weekly Fundamental Analysis February 27 – March 2, 2012, Forecast

By FX Empire.com

Economic Events: (GMT)

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)
• Heating Oil & Propane Update (October-March)
  Heating Oil, Propane Residential and Wholesale Price Data
  Release Schedule: Wednesday at 1:00 p.m. EST
• Weekly Coal Production
  Release Schedule: Thursday by 5:00 p.m. EST
• Weekly NYMEX Coal Futures
  Release Schedule: Monday by 5:00 p.m. EST
• Coal News & Markets
  Release Schedule: Monday by 5:00 p.m. EST
• Natural Gas Weekly Update
  Release Schedule: Thursday between 2:00 and 2:30 p.m. (Eastern Time)
• Weekly Natural Gas Storage Report
  Release Schedule: Thursday at 10:30 (Eastern Time) (schedule)

It is a very busy week with economic events combining the end and the beginning of a month.

Please see the daily fundamental forecasts for details on each of these events.

Below are the only major events of the week.

The G20 Summit is taking place in Mexico this week.

Feb. 27	15:00	USD	Pending Home Sales (MoM)
Feb. 28	13:30	USD	Core Durable Goods Orders (MoM)
13:30	USD	Durable Goods Orders (MoM)
15:00	USD	CB Consumer Confidence
19:00	USD	Beige Book
Feb. 29	13:30	USD	GDP Price Index (QoQ)
13:30	USD	GDP (QoQ)
14:45	USD	Chicago PMI
15:00	USD	Fed Chairman Bernanke Testifies
Mar. 01	13:30	USD	Core PCE Price Index (MoM)
13:30	USD	Personal Spending (MoM)
13:30	USD	Initial Jobless Claims
13:30	USD	Continuing Jobless Claims
15:00	USD	ISM Manufacturing Index
15:00	USD	Fed Chairman Bernanke Testifies

Historical:

High: 114.57

Low: 76.84

Rule: 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:
Oil spread bets are monthly contracts. This means that:
a) You don’t pay any rollover charges; the bet will run until the contract ends;
b) Now, get this, the spread bet runs out (contract expires) in the middle of the month before the month it says on the tin. So, for example, the Brent Crude August contract runs out (expires) on 14th July. How dumb is that?

What to watch when trading
trading oil involves keeping an eye on a few different factors to the standard investment stuff. In addition to the run of the mill economic data that will gives clues as to whether the world’s factories are burning more or less oil there’re a couple of seasonal factors:

First, courtesy of Top Gear, there’s the US Driving Season

Now switch over to the weather forecast to see how windy it is. The US Hurricane Season officially runs from 1st June to 30th November, but don’t expect the forces of nature to pay too much attention to the dates. Hurricanes tend to hit the Gulf of Mexico, which is filled to the rafters with oilrigs (over 20 rigs went missing due to Hurricane Katrina in 2005).

Notice the seasonal rise in the oil price during the hurricane season.

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.

Oil Trading Strategies
The choice here is between trading your views and using technical analysis keep in mind you’ll be up against specialists who might have the inside track on something.

Analysis and Recommendation:

Crude Oil climbed this week to 109.70 on the geopolitical worries between Iran and Israel and the continued mounting tension, along with the Islamic nation stopping oil shipments to France and other EU nations, prior to the embargo effective date. Most countries have already made alternative arrangements, so this rise is only on a supply disruption and should subside quickly. Also strong economic news this week out of China, the US and German, as well as the Greek agreements and a weak USD helped drive up the prices.

Highlights of major economic events for the week of February 20-24, 2012

U.S. crude oil refinery inputs averaged less than 14.9 million barrels per day during the week ending February 17, 170 thousand barrels per day above the previous week’s average. Refineries operated at 85.5 percent of their operable capacity last week. Gasoline production increased last week, averaging nearly 9.0 million barrels per day. Distillate fuel production decreased last week, averaging just under 4.3 million barrels per day.

U.S. crude oil imports averaged nearly 9.1 million barrels per day last week, up by 335 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged about 8.8 million barrels per day, 211 thousand barrels per day above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 845 thousand barrels per day. Distillate fuel imports averaged 122 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.6 million barrels from the previous week. At 340.7 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 0.6 million barrels last week and are in the upper limit of the average range

The sale of new single-family homes in the U.S. fell slightly in January, but only because sales in December were revised higher. Taken together, sales in those two months were the strongest in a year, a good sign for a market that’s been in a deep slump since the 2007-2009 recessions.

Consumer sentiment rose in February to the highest level in a year on strong awareness of improving employment, according to a gauge released Friday by the University of Michigan

Consumer sentiment rose to 75.3 in February from 75 in January, achieving a sixth month of improvement. Consumers’ expectations rose to 70.3 from 69.1, while their views on current conditions declined to 83 from 84.2.

In the UK today Q4 2nd Estimate GDP -0.2% q/q; +0.7% y/y LONDON (MNI) – Household spending rose for the first time in over a year in the fourth quarter and net exports boosted growth, but these were offset by a large fall in investment spending, figures from National Statistics showed Friday

In France today February consumer confidence up 82; January 81 (unrevised) -Matches expectations; MNI analysts survey median forecast 82 -Buying-propensity up 5 points -Future inflation worries down 2 points -Jobless fears down 1 point

The European Commission sharply reduced its forecasts for growth in the EU and the Eurozone for 2012 while also raising its forecasts for inflation, suggesting that the European economy could struggle with stagflation in 2012 The Commission said the economy in the 27-member EU will not grow at all this year.

In the UK Jan Mortgage Approvals Highest Since Dec 2009 says British Bankers Assn. January mortgage approvals rose to their highest level since December 2009

Germany preliminary December machine output -1.9% y/,y. Also Germany’s Business morale up more than expected.

Italian consumer confidence rose to 94.2 from 91.8 in Jan when it had posted a 16-year low. The improvement was the result of better sentiment in the general economic climate.

Fitch downgraded Greece’s credit rating.

Eurozone Nov Industrial orders revised to -1.1% from -1.3%, y/y revised to -2.5% from -2.7% A much stronger set of numbers including the revisions.

Eurozone Feb Flash composite PMI 49.7 from 50.4 – expected 50.6

German February flash manufacturing PMI 50.1

French February flash manufacturing PMI 50.2

Bank of England Governor Mervyn King said the BOE was expecting a “zigzag” pattern of the quarterly growth this year and the detailed forecasts underpinning the quarterly Inflation Report, published Wednesday, bear this out.

In the UK Public Borrowing reported the highest surplus since January 2008, and along with revisions to previous data, suggest borrowing is on track to undershoot the latest forecasts

Greek bailout will “likely” get final approval in the week starting March 12, according to statement on Finnish Finance Ministry website. “The final approval for activating the EFSF guarantees and completing the PSI operation are conditional on the Troika and the eurogroup deeming the PSI as successful and Greece to have fulfilled its commitments”

China’s VP Xi Jinping, in a speech in Dublin last night, said his country is considering more support for Europe. The official said “We are considering more involvement in helping address the European debt issue through EFSF, ESM and other channels” adding “China supports the European integration process, the euro, by purchasing European bonds.”

UK Gross mortgage lending fell 14.1% on the month in January but was up 10.2% on a year ago, according to Council of Mortgage Lenders data. As the CML figures are not seasonally adjusted it said the monthly fall in January was not unexpected. The 10.2% rise on the year.

In Japan, Department store sales in Japan were hit by record snowfalls in some regions in January, slipping 1.1% on year and giving up a 0.8% rise in December, data released by the Japan Department Stores Association showed on Monday.

Japan posts the highest trade deficit in history. The Bank of Japan says its January real export index rose a seasonally adjusted 0.2% m/m to 116.5 (100 for the 2005 base year), posting the second consecutive monthly gain, after +1.1% in December and -2.7% in November. The January reading was the highest since 118.2 in October. The Bank of Japan Governor Masaaki Shirakawa renewed his pledge to maintain the BOJ’s monetary easing while also repeating that the bank’s new explicit 1% inflation goal is similar in nature to the Federal Reserve’s own 2% price target.

Feb. 20	GBP	Rightmove House Price Index (MoM)	4.1%	-0.8%
Feb. 21	AUD	Monetary Policy Meeting Minutes
NZD	Inflation Expectations (QoQ)	2.5%	2.8%
CAD	Core Retail Sales (MoM)	0.0%	0.2%	0.4%
CAD	Retail Sales (MoM)	-0.2%	-0.2%	0.4%
CAD	Wholesale Sales (MoM)	0.9%	0.5%	-0.3%
Feb. 22	AUD	Wage Price Index (QoQ)	1.0%	0.8%	0.7%
EUR	French CPI (MoM)	-0.4%	0.3%	0.4%
EUR	French Manufacturing PMI	50.2	48.7	48.5
EUR	German Manufacturing PMI	50.1	51.5	51.0
EUR	Manufacturing PMI	49.0	49.4	48.8
EUR	Industrial New Orders (MoM)	1.9%	0.6%	-1.1%
USD	Existing Home Sales	4.57M	4.67M	4.38M
Feb. 23	EUR	German Ifo Business Climate Index	109.6	108.8	108.3
EUR	German Current Assessment	117.5	116.5	116.3
EUR	German Business Expectations	102.3	102.0	100.9
GBP	BBA Mortgage Approvals	38.1K	37.3K	36.6K
GBP	CBI Industrial Trends Orders	-3	-13	-16
USD	Initial Jobless Claims	351K	354K	351K
USD	Continuing Jobless Claims	3392K	3460K	3444K
Feb. 24	EUR	German GDP (QoQ)	-0.2%	-0.2%	-0.2%
GBP	Business Investment (QoQ)	-5.6%	-0.4%	1.0%
GBP	GDP (QoQ)	-0.2%	-0.2%	-0.2%
USD	Michigan Consumer Sentiment Index	75.3	72.5	72.5
USD	New Home Sales	321K	315K	324K

Sovereign Bond Auction Schedule

Feb 27-Mar 02 n/a UK Mini Tender

Feb 27 10:10 Italy BOT auction

Feb 27 10:30 Germany Eur 3.0bn Feb 2013 Bubill

Feb 27 11:00 Belgium OLO Auction

Feb 27 12:00 Norway Details bond auction on May 05

Feb 28 01:30 Japan Auctions 2Y JGBs

Feb 28 10:10 Italy BTP/CCTeu auction

Feb 28 10:30 Belgium Auctions 3 & 6M T-bills

Feb 28 15:30 UK Details gilt auctions on Mar 06 & Mar 07

Feb 29 10:10 Sweden Auctions T-bills

Feb 29 10:30 Germany Eur 4.0bn 2.0% Jan 2022 Bund

Feb 29 15:30 Sweden Details nominal bond auction on Mar 07

Mar 01 09:30 Spain Bono auction

Mar 01 09:50 France OAT auction

Mar 01 10.30 UK Auctions 4.0% 2022 conventional Gilt

Originally posted here