Technical & Fundamental Oil Reports Specialists

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Crude prices fall for the sixth consecutive week

Published Monday, August 10th, 2015

July was awful for oil and August is providing no relief. After a 17% fall last month Brent fell another 7% last week. For WTI it has been 21% and 7%. Both grades closed down again on Friday touching lows of $48.42 bbl on Brent and $43.70 bbl on WTI in the process. Sadly there is no relief in sight and the technical knives are out with the years lows well within range.

The Baker Hughes figures showed the US drilling rig count increasing for a third consecutive week bringing the total rise in the period to 32 rigs. The May/June period when WTI was trading at around $60 bbl triggered renewed drilling interest which is coming through now. Moody’s price assumptions for financial rating purposes are important and on Friday it cut both Brent and WTI by $5 bbl for this year to $55 and $ 50 bbl. The weekly EIA figures showed US domestic production still running at close to 9.5 mbpd.

Oil is giving not only producers and traders a headache but also the Federal Reserve because the benefit of a reduced oil tax on consumers is being offset by the impact of the price fall on other data. Business investment has taken a big hit, the price fall is deflationary and the energy industry is shedding 10 to 15,000 jobs a month. Employment and inflation are the big data numbers the Fed cares about and oil is clouding the picture.

to read the rest of the report, please click here

Posted by David Hufton