Crude and Brent Oil Fundamental Analysis

    • Crude and Brent Oil Fundamental Analysis

      Crude Oil is trading at 97.35 down by 85 cents as sentiment shifted around the globe as demand for energy products is declining as tensions ease in the middle east and data is supportive of a slow and sluggish recovery. Brent oil gained 12 points diverging from crude to trade at 109.13 with the spread at $12. There was a heavy slate of U.S. economic data released Tuesday and it was a mixed bag for markets. The highlight was a weaker consumer confidence index for October, amid the U.S. government shutdown. The confidence data did give the gold market a brief lift, but it did not last long.

      The U.S. dollar index was firmer Tuesday on more short covering after hitting a 10.5-month low last Friday. Meantime, Nymex crude oil futures were lower and hovering not far above the recent two-month low.

      After negotiations led by the oil ministry, the protesters promised to lift their blockades of oil production, said a spokesman for Libya’s National Oil Corporation. The oil market was anticipating a weak report on commercial crude and products stockpiles from the Department of Energy, a weekly indicator of energy demand in the world’s largest economy.

      Allegations of chemical weapons use in Syria and a new wave of instability in Iraq, Libya, Egypt and Yemen pulled global crude oil prices up by an average of $5-10 per barrel in the third quarter. In North America, the massive infrastructure build-out has removed many logistical roadblocks that have kept inland crude substantially undervalued over the last few years. Global oil demand growth remains modest, but strong growth in non-OPEC crude production – particularly from the US – is putting substantial pressure on OPEC to keep its production in check.