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 been on a steady decline for two weeks dropping from highs of 1.06. Geopolitical tensions have diminished and demand and forecast demand have declined. OPEC continues to pump records volumes.

Date

Last

Open

High

Low

Change %

Jun 01, 2012

83.28

86.55

86.56

82.31

-3.81%

May 31, 2012

86.57

87.71

88.28

85.86

-1.29%

May 30, 2012

87.70

90.72

90.81

87.28

-3.33%

May 29, 2012

90.72

91.05

92.17

90.25

-0.38%

May 28, 2012

91.06

91.31

91.99

91.06

-0.28%

The U.S. Energy Information Administration (EIA) estimates that global spare crude oil production capacity averaged about 2.4 million barrels per day (bbl/d) during the first quarter of 2012, down about 1.3 million bbl/d from the same period in 2011 (see chart above). The world’s spare crude oil production capacity is held by member countries of the Organization of the Petroleum Exporting Countries (OPEC). Spare capacity can serve as a buffer against oil market disruptions, and it gives OPEC additional political and economic influence in world markets. There is little or no spare capacity outside of the OPEC member countries.

Spare crude oil production capacity is now less than 3% of total world crude oil consumption–the lowest proportion since the fourth quarter of 2008–based on EIA estimates.

Spare crude oil production capacity is an important indicator of producers’ ability to respond to potential disruptions; consequently, low spare oil production capacity tends to be associated with high oil prices and high oil price volatility. Similarly, rising spare capacity tends to be associated with falling oil prices and reduced volatility. However, spare capacity must also be considered in the context of a number of other market factors that can drive crude oil prices, such as global supply, demand, and inventory levels.

EIA defines spare crude oil production capacity as potential oil production that could be brought online within 30 days and sustained for at least 90 days, consistent with sound business practices. This does not include oil production increases that could not be sustained without degrading the future production capacity of a field.

U.S. crude oil import patterns have been undergoing significant shifts in recent months. While growing domestic tight oil production from the Bakken formation in North Dakota and elsewhere has helped displace imports from some countries, U.S. import volumes from the Canadian oil sands and Saudi Arabia have been on the rise. In total, U.S. crude imports fell about 94,000 bbl/d (1 percent) from the first quarter of 2011 to the first quarter of 2012. New sources of North American crude supply, adjustments in transport logistics and deep shifts in the depth of conversion and geographic distribution of U.S. refining capacity are redrawing the pattern of U.S. crude imports.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Historical:

Highest: 114.81 on May 02, 2011

Average: 88.78 over this period

Lowest: 67.17 on May 25, 2010

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)

Click here a current Crude Oil Chart.

Originally posted here