The sharp sell-off continues in the oil market

Friday, November 14, 2014

The strong US dollar rattled most commodity prices adding serious pressure to base metals and crude oil prices. The USD index has continued its strong upside momentum, breaching above 88.0. Copper retreated sharply and tested a low yesterday at $6590 to finish the session at $6657, while this morning it came under renewed pressure to retest $6600 in early trade. Aluminium extended losses towards $2,000, which holds as immediate support.

USD Index continues its strong uptrend

DXY Curncy (DOLLAR INDEX SPOT)  2014-11-14 08-09-20

LME Copper 3M retreats towards $6600

LMCADS03 Comdty (LME COPPER    3 2014-11-14 08-51-42

Brent front month futures plunged more than $4 yesterday to finish the session at $77.49 per barrel as bearish oil fundamentals and a strong USD continue to weigh heavily on market sentiment. WTI front month futures retreated sharply to test $74 per barrel, verifying the strong downside momentum in the oil market. This morning, crude oil prices came under renewed pressure as WTI front month futures are heading towards $73 per barrel, while support holds near the key level of $70. All eyes are on the upcoming OPEC meeting on 27th November.    

WTI front month futures retreat towards $73

CLZ4 Comdty (WTI CRUDE FUTURE  D 2014-11-14 08-53-27

Germany’s economy grew by 0.1% in Q3 2014, in line with analysts’ expectations following a negative reading of -0.2% in Q2 2014. The European equity markets opened the session in positive territory, as the CAC, DAX, IBEX and London equity benchmark edged higher in early trade adding between 0.10% and 0.45%. The release of Eurozone’s GDP data as well as UK construction output could provide further direction to the markets. In the US, the main focus will turn to the release of the US retail sales, import price index, business inventories as well as University of Michigan/Reuters survey.  

In Asia, the Nikkei index climbed higher almost 100 points (+0.98%) to retest 17,500. The Hang Seng index edged higher overnight adding more than 65 points (+0.28%) towards 24,100. In the US, the Dow Jones index posted a new record high at 17,705 and closed the trading session at 17,652 (+0.23%). 

Events for today:

 

0700

DE

Q3

GDP

0930

UK

Sep

Construction Output

1000

EZ

Oct

CPI

1000

EZ

Q3

GDP

1330

US

Oct

Retail Sales

1330

US

Oct

Import Price Index

1455

US

Nov

University of Michigan Survey

1500

US

Sep

Business Inventories

All times UK Local Time

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