Technical & Fundamental Oil Reports Specialists

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Dollar and weather add to the oil burden

Published Friday, December 18th, 2015

The early verdict is that the Fed has not spooked markets. There has been no worrying fallout so far. US equities rallied on Wednesday and then fell yesterday. European equities in contrast, seeing the positive reaction in the US immediately following the announcement rallied yesterday. Presumably they will fall today. There is no doubt in which continent the market leaders are sitting.

The most significant fallout is in a strengthening dollar which has added to commodity woes. The euro has declined by 1.3% and sterling traded below $1.49. The dollar index is up 1.4%. Crude settled down 57cts/bbl on January WTI (34.95) and -33cts/bbl (37.06) on February Brent.

The weather gods are not helping either. Remember heating degree days? Between global warming and El Nino they have virtually been confined to history. According to the Met office last year global temperatures were 0.61°C above the long-term average. This year it will be +0.72°C and next year is forecast at +0.84°C.

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Posted by David Hufton