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Oil N' Gold Focus Reports
Weekly Fundamentals - Both OPEC and US Payrolls Sent Pleasant Surprises Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Sun Dec 04 16 04:15 ET
As we mentioned in the beginning of the week, the two critical events of the week were OPEC's meeting and US employment report. Both surprised the market to the upside. For the former, OPEC announced after the meeting in Vienna that it targets to cut production to 32.5M bpd, representing a -1.2M bpd, or -3.7%, reduction from October levels.
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Inflationary Pressure due to Higher Oil Prices Weighed on Equities Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Fri Dec 02 16 00:05 ET
OPEC's deal to cut output continues to drive oil prices higher, sending both crude oil benchmarks above US$50/bbl. Energy shares also strengthened, but the broader stock indices were mixed. US dollar remained firmed and Treasury yields climbed further higher.
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Oil Prices Jump as OPEC Agrees to Cut Output Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Thu Dec 01 16 00:29 ET
Oil prices rallied sharply as OPEC agreed to cut. The organization announced that it targets to cut production to 32.5M bpd, the lower end of the range indicated the "Algiers Accord" in September. It also represents a -1.2M bpd, or -3.7%, reduction from October levels. Meanwhile, OPEC noted that non-OPEC countries have also agreed to cut output by -0.6M bpd with half of the contribution coming from Russia.
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Oil Prices Plunge as Market Awaits OPEC Meeting Outcome Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Wed Nov 30 16 00:22 ET
As the market is focused on the OPEC meeting in Vienna today, energy prices fell amidst concerns over disappointing outcomes. The increase in Cushing stockpile also added pressure to oil prices. The front-month WTI crude oil contract plunged -3.93% while the Brent contract fell -3.86% for the day. Stock markets were mixed.
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Energy Prices Rebounded as OPEC Ministers Hinted on Output Deal. Sentiment Damped by Italian Referendum Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Tue Nov 29 16 00:36 ET
Energy prices rebounded on comments from Iraqi oil minister that he is "optimistic" of a deal in Vienna. The front-month WTI crude oil contract gained +2.22% to settle at 47.08 while the Brent contract added +2.12% to close at 48.24. For refined oil products, gasoline and heating oil prices rose almost +3% for the day.
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OPEC Meeting and US Payrolls Focuses of the Week Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Mon Nov 28 16 01:08 ET

US dollar retreated on profit-taking and as the market awaits the US employment report for November. The DXY index slipped -0.64% to 100.84 at the time of writing this report. Crude oil prices remained under pressure with both benchmarks slipping almost -0.4% so far today. The market is worried about the outcome of the OPEC meeting in Vienna later this week. Indeed, we have been less optimistic than the market. We expect lack of compliance as usual by OPEC members even if an output cut/freeze cut can be reached. We have a light calendar today. In Europe, the ECB would release its money and credit aggregates for October while Italy will report that business and consumer confidence indices for November. Moreover, the OECD will release its latest assessment of the global economic outlook.

For the week ahead, the focus is on OPEC's formal meeting in Vienna this Wednesday and the release of US non-farm payrolls on Friday. For the former, uncertainty remains high. The latest news is that while some members, such as Algeria and Venezuela, seek to reach a deal to output cut, Saudi Arabia has recently suggested that a rate cut might not be needed as demand should recover next year. Khalid Al-Falih, the Kingdom's oil minister indicated that with oil demand expected to "recover in 2017, then prices will stabilize, and this will happen without an intervention from OPEC". Regarding the cancellation of the pre-meeting discussion originally scheduled on Monday, he noted that "it's not beneficial to attend the meeting with producers from outside OPEC before holding meetings within OPEC and deciding whether to cut or continue with current levels of production". In the meantime, Algeria and Venezuela continue to seek support from Russia with energy ministers of both countries will meet in Algiers and then travel to Moscow on Monday.

Concerning the US employment report, non-farm payrolls probably increased +170K in November, after a +161K addition a month ago. The unemployment rate might have stayed unchanged 4.9%. Meanwhile, average hourly earnings probably increased +0.3%, in turn lifting the annual growth by one-tenth. Ahead of it would be Wednesday's ADP report. It is expected that the number of employment rose +160K in November, up from a +147K addition in the prior month.

Elsewhere, China would release its PMI indices on Thursday. The official manufacturing PMI probably slipped to 51 in November form 51.2 a month ago. Caixin's PMI manufacturing index probably has dropped -0.3 point to 50.9 for the month. Europe would also release a number of PMI data Thursday. The manufacturing PMI for the Eurozone probably stayed unrevised at 53.7, while that the for UK might have edged +0.1 point higher to 54.4.

 
Weekly Fundamentals - Awaiting OPEC Deal Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Sat Nov 26 16 09:42 ET
Crude oil has been experiencing volatile trading in recent weeks as the market gauges the possibility of an output cur/freeze deal at the formal OPEC meeting on November 30. Both the WTI and Brent crude benchmarks rose above US$50/bbl in early-mid October as OPEC announced on September 28 that the members tentatively agreed to limit production, reducing the aggregate output to 32.5-33M bpd.
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Markets Shrugg Off Rumors of ECB's QE Delay Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Fri Nov 25 16 00:43 ET
With the US markets closed on Thanksgiving Day holiday, the focus is on Europe. Equities were generally firmer with the STOXX 600 index adding +0.3%. Regional indices also climbed higher with Germany's DAX up 0.3% and UK's FTSE up +0.2%. Euro, the single currency, remained range-bound against US dollar,...
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USD and Yields Soar as FOMC Minutes Affirmed Rate Hike Coming Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Thu Nov 24 16 01:47 ET
US dollar index (DXY) resumed recent rally, soaring to a new 13-year high of 101.91 as the November FOMC minutes reinforced conviction of rate hike in December.US Treasury yields also climbed higher with the 2-year and 10-year yields adding +4 bps and +3.6 bps to 1.135% and 2.355% respectively.
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OPEC Cut Deal More Uncertain as Iran and Iraq Refuse to Join Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Wed Nov 23 16 00:35 ET
Crude oil prices had a volatility day as the preliminary OPEC meeting in Vienna has increased the uncertainty for an output deal next week. Prices initially extended the rally on reports suggesting that the members were proposing a -4.5% cut for most countries. This would result in faster output reduction than the proposal first outlined in September.
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Crude Oil Soared to 3-Week High. All Eyes on OPEC Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Tue Nov 22 16 00:43 ET
Crude oil prices rallied on renewed hopes of an OPEC output cut/freeze deal. Russian President Putin indicated, at a news conference after the APEC summit on Sunday, that there is a "high probability" that a deal to limit oil production would be reached at the November 30 OPEC meeting. He added that Russia would "do everything" that the OPEC members "are expecting… To freeze crude production is not an issue for us". This echoed Iranian oil minister Bijan Zangeneh's comment that OPEC is "highly likely" to reach a final agreement to curb oil production at the November meeting.
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