WTI futures hover around key support of $40/barrel

Friday, November 20, 2015

Crude oil prices remain under pressure as ongoing concerns regarding global supply glut dominate the market and weigh heavily on market sentiment. WTI front month futures tested a new recent low at $39.89 yesterday but managed to finish the trading session at $40.54 per barrel. This morning, WTI futures came under renewed pressure in early trade and extended declines towards $40 per barrel while the strong USD adds additional pressure to the market. We acknowledge that there is strong support for WTI futures around $40/barrel; however, a close below this level opens the potential for further declines towards the $30-$35 range in the short-term. Brent futures tracked the downtrend after hovering around $44 per barrel this morning. Please note that both WTI and Brent front month futures have declined over $8/barrel within 3 weeks in November.

WTI front month futures hover around $40/barrel

 CLZ5 Comdty (WTI CRUDE FUTURE  D 2015-11-20 09-00-23

The USD index rebounded from yesterday’s losses and climbed higher towards 99.50 against a basket of currencies, weighing on most commodity prices. On the other hand, the euro came under renewed pressure after hovering around 1.0650 against the USD this morning.          

European equity markets were mixed in early trade this morning as the CAC, IBEX and London equity benchmark indices retreated between 0.10% and 0.35%, while the DAX edged slightly higher and added 0.10%. Germany’s PPI declined by 0.4% /m in October, missing expectations of a 0.2% drop, while the y/y figure was reported at -2.3% in October versus analysts’ estimates of a 2.0% decline. Due to lack of major economic indicators, market participants will be keeping an eye on the release of the US Kansas City Fed manufacturing activity as well as Eurozone’s consumer confidence data.

Asian equity markets extended gains overnight as the Hang Seng index climbed over 250 points (+1.15%) towards 22,760, while the Shanghai composite index added 0.37% to retest 3,630. However, the Nikkei index edged slightly higher towards 19,900.  

Precious metals came under renewed pressure this morning with gold falling towards $1,080/ounce and silver retreating towards the key support level of $14.00. Copper remains in negative territory after hovering around $4,600 due to bearish fundamentals which weigh on market sentiment and raise renewed concerns regarding a slowdown of copper demand in the last quarter of 2015.

XAU - Gold Spot  

XAU Curncy (Gold Spot   $_Oz )  D 2015-11-20 09-01-57

 

Events for today:

0700

DE

Oct

PPI

0930

UK

Oct

PSNCR & PSNB

1500

EZ

Nov

Consumer Confidence

1600

US

Nov

KC Fed Manufacturing Activity

All times UK Local Time

 

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