Friday, January 13, 2012

weekly Crude oil prices prediction jan 16-20 2012

Crude Oil Forecast January 16-20, 2012, Fundamental Analysis : Crude oil prices fell sharply last week, as the strength of the U.S. dollar in addition to rising volatility in markets over the past period pushed investors away from higher yielding and risky assets, where the U.S. dollar gained huge momentum amid rising concerns over the outlook for global growth on signs of slowing economic activities in major economies around the world.

Nevertheless, all the hopes came to halt with the end of the week with rating agencies again raising the heat. Already throughout the week comments from Fitch were generally targeting the risk that Italy faces and the likely rating cut and that was reiterated by S&P on Friday that sent markets frantically lower.

This week the weak data flow from the euro area will leave the focus on the debt crisis with more auctions and eyes on rating agencies, especially after Fitch earlier said that the review might be concluded around January 15 and with S&P’s warning investors will remain sensitive to any comments and eyes the auctions closely with Spain, France, Portugal and Greece heading to the market.

From the U.S. front heavy data is awaited yet generally we expect good industrial and housing data and if the sentiment remains fragile and good figures are provided from the U.S. the attempts for the euro to stabilize last week will be dethroned and the bearishness will take hold once again assuring that it was only false attempts as unless the euro stabilizes this week higher then we can surely say the bearishness is back.

We need to track the debt sales this week as well with eyes on Italy, France, Greece and Portugal as the yields and demand will be closely observed. The euro area lacks major fundamentals yet the debt crisis developments and any comments from leaders will be watched.

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 January 16:
Both economies do not have fundamentals queued for release and the movement will be based on the market sentiment.

10:00 GMT Slovakia sells bills
10:30 GMT Netherlands sell bills
14:00 GMT France to sells bills

Tuesday January 17:

As for the United States, the day will start at 13:30 with the January Empire Manufacturing index which is expected with improvement to 10.50 from 9.53.

09:30 GMT Spain sells bills
10:00 GMT Greece sells bills
10:30 GMT Belgium sells bills

Wednesday January 18:
As for the United States a busy day starts at 13:30 GMT with the Producer Price Index for December where it is expected to ease on the month to 0.1% after 0.3% and on the year expected at 5.1% from 5.7%; excluding food and energy the index is expected steady at 0.1% and on the year to slow to 2.8% after 2.9%.

At 14:00 GMT the TIC flows for November are due after the total Net TIC Flows in October declined in October with total selling of $48.8 billion.

At 14:15 GMT the December Industrial Production index is expected with 0.5% rebound from the previous month’s 0.2% drop and capacity utilization to tick higher to 78.1% from 77.8%.


10:15 GMT Germany sells bills
10:30 GMT Portugal sells bills
10:30 GMT Belgium sells bills

Thursday January 19:

The U.S. economy will release initial jobless claims for the week ended Dec. 24 and continuing claims for the week ended Dec. 16, where they will be available at 13:30 GMT. At 14:45 GMT, Chicago purchasing manger is estimated to retreat to 60.2 in Dec. from the previous 62.6. 15 minutes later, pending home sales for Nov. will signal 1.8% advance compared with the preceding 10.4% rise.

The U.S. will start the data at 13:30 GMT with the Inflation Report. The CPI index is expected with 0.1% rise on the month after holding unchanged the previous month and on the year to slow to 3.1% after 3.4%. Excluding food and energy the index is expected with 0.1% rise on the month after 0.2% gain and on the year to hold at 2.2%.

December Housing Starts index is also due the same time and expected flat at 685,000 while Building Permits are expected with 0.7% drop to 675,000 from 681,000.

As for the Jobless Claims for the week ending in January 14 it is also due at 13:30 GMT as usual after last week they rose 24,000 to 399,000 last week.

As for the Philadelphia Fed Index for January the index is due 15:00 GMT and expected to improve slightly to 11.0 from 10.3.

At 16:00 GMT, the EIA report for crude oil inventories will be released for the week ending January 13, where last week crude oil inventories increased by 5.0 million barrels.


09:30 GMT Spain sells bills

Friday January 20:
The United States is set to end the week with the Existing Home Sales for the month of December at 13:00 GMT where they are expected to extend the gain with 5.2% to 4.65 million from 4.42 million. Source
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