Crude Oil Weekly Price Forecast – Crude Oil Markets Recover After Rough Beginning to the Week
By:Christopher Lewis
Published: Nov 5, 2021, 17:57 CDT
The West Texas Intermediate Crude Oil market has rallied during the day on Friday to wipe out much of the losses during the course of the week. The resulting candlestick looks a lot more supportive than the one that could have been printed on Wednesday, so this of course is a good sign. The jobs number in America was much stronger than anticipated and that could have people thinking that the demand for crude oil will only continue to go higher. With that in mind, it is very likely that we continue to see more of this “buy on the dip” mentality going forward, especially from shorter-term traders. Currently, the $75 level is the “floor” for this market, while the $85 level above is the “ceiling.”
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Always remember that crude oil futures are the most actively traded commodity futures. Many of the "Day Traders" that control the daily moves up or down in the oil price don't know much about the physical oil market, so they are trading based a chart analysis. To me the oil market is tight and going to get a lot tighter six months from now when the seasonal peak for oil demand starts mid-May each year. Today the traders that were short oil hit the "Cover Button" when the bullish jobs report came out.
Oil Price spikes after bullish US Jobs Report - Nov 5
Oil Price spikes after bullish US Jobs Report - Nov 5
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price spikes after bullish US Jobs Report - Nov 5
My comments are in blue.
WASHINGTON (Reuters) -U.S. and European equities markets resumed their rally and the dollar index hit a one-year peak on Friday after Labor Department job data rebounded in a reassuring sign for investors who had worried for months about how stocks would fare once the Fed began to rolling back the 2020 pandemic-fueled stimulus.
Nonfarm payrolls increased by 531,000 jobs last month as the surge in COVID-19 infections over the summer subsided, offering more evidence that U.S economic activity was regaining momentum early in the fourth quarter.
But global stocks have also climbed to a series of records in recent weeks, bolstered by blockbuster earnings reports from the biggest U.S. listed companies.
The dollar index, which measures the greenback against a basket of six rivals, rose as high as 94.634 after the jobs report, its highest level since Sept. 25, 2020.
The dollar, which has strengthened to hit its highest level in more than a year, provided the U.S. Federal Reserve more proof that the economic recovery has regained momentum. < Oil trades in U.S. dollars, so WTI's price holding over $80 with the dollar up is very bullish for oil.
"If these numbers continue at this pace, we could probably see full employment at the end of the first quarter," Peter Cardillo, chief market economist at Spartan Securities, said.
While crude prices rose more than 2% on Friday on renewed supply concerns after OPEC+ producers rebuffed a U.S. call to accelerate output increases even as demand nears pre-pandemic levels. < Keep in mind that OPEC+ is struggling to increase production by 400,000 bpd month-after-months. When it is clear that OPEC+ is maxed out, oil will go over $100/bbl.
Brent crude was up $2.14, or 2.7%, at $82.68 per barrel by 1:01 a.m. EDT (1701 GMT). West Texas Intermediate crude (WTI) gained $2.47, or 3% to $81.28.
"Markets know that the release of strategic reserves can only have a temporary bearish effect on prompt prices and is not a lasting solution for an imbalance between supply and demand," Rystad Energy head of oil markets Bjornar Tonhaugen said in a note.
The Dow Jones Industrial Average recently rose 0.33%, while the S&P 500 gained 0.23%. The Nasdaq Composite added 0.02%. The pan-European STOXX 600 index rose 0.05%.
MSCI's gauge of stocks across the globe gained 0.10%.
Friday's advances came even after the Federal Reserve finally announced on Wednesday that it would begin tapering its massive asset purchase program, though Fed Chair Jerome Powell said he was in no rush to hike borrowing costs.
"Even though it transpired as expected, it is a significant milestone. The direction of travel is now clearly towards policy normalisation, though the Fed emphasised that tapering is not tightening," said Stefan Hofer, chief investment strategist for LGT in Asia Pacific.
"It was really expert communication and very well handled."
Benchmark 10-year notes last rose 19/32 in price to yield 1.46%, from 1.524% late on Friday
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan % lower, while Japan's Nikkei lost 0.61%.
Hong Kong had weighed on the regional index, falling 1.25% as index heavyweight and rate-sensitive HSBC fell 3.6% following a dovish call from the Bank of England (BoE) and anxiety over property stocks.
Trading in shares of Chinese developer Kaisa Group Holdings Ltd was suspended a day after the company said a subsidiary had missed a payment on a wealth management product, the latest sign of a deepening liquidity crisis in the Chinese property sector.
An index tracking Hong Kong-listed mainland Chinese developers slipped 2.8%, and an onshore China property index lost 2%.
More broadly, Shanghai shares lost 1% and Chinese blue chips slipped 0.5%.
WASHINGTON (Reuters) -U.S. and European equities markets resumed their rally and the dollar index hit a one-year peak on Friday after Labor Department job data rebounded in a reassuring sign for investors who had worried for months about how stocks would fare once the Fed began to rolling back the 2020 pandemic-fueled stimulus.
Nonfarm payrolls increased by 531,000 jobs last month as the surge in COVID-19 infections over the summer subsided, offering more evidence that U.S economic activity was regaining momentum early in the fourth quarter.
But global stocks have also climbed to a series of records in recent weeks, bolstered by blockbuster earnings reports from the biggest U.S. listed companies.
The dollar index, which measures the greenback against a basket of six rivals, rose as high as 94.634 after the jobs report, its highest level since Sept. 25, 2020.
The dollar, which has strengthened to hit its highest level in more than a year, provided the U.S. Federal Reserve more proof that the economic recovery has regained momentum. < Oil trades in U.S. dollars, so WTI's price holding over $80 with the dollar up is very bullish for oil.
"If these numbers continue at this pace, we could probably see full employment at the end of the first quarter," Peter Cardillo, chief market economist at Spartan Securities, said.
While crude prices rose more than 2% on Friday on renewed supply concerns after OPEC+ producers rebuffed a U.S. call to accelerate output increases even as demand nears pre-pandemic levels. < Keep in mind that OPEC+ is struggling to increase production by 400,000 bpd month-after-months. When it is clear that OPEC+ is maxed out, oil will go over $100/bbl.
Brent crude was up $2.14, or 2.7%, at $82.68 per barrel by 1:01 a.m. EDT (1701 GMT). West Texas Intermediate crude (WTI) gained $2.47, or 3% to $81.28.
"Markets know that the release of strategic reserves can only have a temporary bearish effect on prompt prices and is not a lasting solution for an imbalance between supply and demand," Rystad Energy head of oil markets Bjornar Tonhaugen said in a note.
The Dow Jones Industrial Average recently rose 0.33%, while the S&P 500 gained 0.23%. The Nasdaq Composite added 0.02%. The pan-European STOXX 600 index rose 0.05%.
MSCI's gauge of stocks across the globe gained 0.10%.
Friday's advances came even after the Federal Reserve finally announced on Wednesday that it would begin tapering its massive asset purchase program, though Fed Chair Jerome Powell said he was in no rush to hike borrowing costs.
"Even though it transpired as expected, it is a significant milestone. The direction of travel is now clearly towards policy normalisation, though the Fed emphasised that tapering is not tightening," said Stefan Hofer, chief investment strategist for LGT in Asia Pacific.
"It was really expert communication and very well handled."
Benchmark 10-year notes last rose 19/32 in price to yield 1.46%, from 1.524% late on Friday
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan % lower, while Japan's Nikkei lost 0.61%.
Hong Kong had weighed on the regional index, falling 1.25% as index heavyweight and rate-sensitive HSBC fell 3.6% following a dovish call from the Bank of England (BoE) and anxiety over property stocks.
Trading in shares of Chinese developer Kaisa Group Holdings Ltd was suspended a day after the company said a subsidiary had missed a payment on a wealth management product, the latest sign of a deepening liquidity crisis in the Chinese property sector.
An index tracking Hong Kong-listed mainland Chinese developers slipped 2.8%, and an onshore China property index lost 2%.
More broadly, Shanghai shares lost 1% and Chinese blue chips slipped 0.5%.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price spikes after bullish US Jobs Report - Nov 5
Wti over $84. Caching
I was looking at where CLR bonds trades they could finance this whole purchase for 4 per cent
And leave their 1.7 b credit line untouched
They said last night they are going to issue 5 and 10 yr bond to private parties
Borrow 3.2 b at 4 per cent and earn 15 per cent (min) with 65 dollar oil
This is going to add 1.00 in eps next year
I was looking at where CLR bonds trades they could finance this whole purchase for 4 per cent
And leave their 1.7 b credit line untouched
They said last night they are going to issue 5 and 10 yr bond to private parties
Borrow 3.2 b at 4 per cent and earn 15 per cent (min) with 65 dollar oil
This is going to add 1.00 in eps next year