Oil prices may continue to fall in the near-term, with WTI potentially reaching $80.00 over the next few weeks. December WTI will expire today, and could lead to a similarly lopsided trade as yesterday’s expiration of December Brent.
A mid-morning attack by Israel of a Hamas leader yesterday sent the oil market higher, but unless the tensions escalate in the near-term, we would anticipate prices to continue moving lower
Look for the slow drift lower to continue in the near-term, as worries about the health of the economy and the fiscal cliff dominate. Stocks sold off yesterday on various corporate and European news items, but closed near the bottom of last week’s trading range as well as close to a new four-month low.
Daily Energy Report – The slow drift lower in oil prices should continue in the near-term, as worries grow over the fiscal cliff and the slow rate of economic growth. WTI could fall toward $80.00/bbl over the next few weeks as fiscal cliff negotiations appear likely to continue through the end of the year, U.S. production continues to grow, U.S. inventories remain elevated, and as problems in Europe remain in place
Energy Price Outlook After a sobering week last week, oil prices are expected to be under pressure again in this week’s trade and potentially fall toward $80/bbl in WTI over the next few weeks. The dominant factors should be increased prospects for slow growth in the U.S., uncertainty over the fiscal cliff, events in Europe including Sunday’s vote in Greece, and OPEC’s cut in demand estimates on Friday. The
Today’s session will likely be muted again by the closure of trading pits in New York, but we expect moderate pressure to remain in place. The market may be setting up for weakness through tomorrow, when many hedge funds are expected to close their books for the year.
This week’s trade in the oil market may witness bottoming action take place, as the U.S. election begins to move to center stage. There may also be an exit from the markets by hedge funds that close their books on Oct 31st, but the impact they actually exert may be somewhat limited in the near-term as their long positioning has already been reduced.
The oil market may continue its short-term correction in the near-term, but it’s also entering a support range between
$81.00 and $85.00/bbl. We think that the rate of decline will slow in the near-term, as some of the impulsive selling and weak longs exited the market during Monday’s session.
Oil prices may continue their short-term correction over the next few days, with support in WTI offered between $81.00 and $85.00/bbl. We think that the rate of decline will slow in the near-term, as some of the impulsive selling and weak longs have exited the market. A focus will be on the FOMC announcement today, but little change in policy is expected after the last meeting’s implementation of QE3.
Welcome to Monday’s Morning Coffee Break – U.S. futures are suggesting a positive open this morning after Friday’s sharpest one day drop in nearly four months. Market participants will be starting the week off with no economic data releases putting the focus on earnings and U.S. politics. Headlines in the Euro Zone will have a stronger impact on U.S. markets as well.
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