Weekly outlook for Crude oil, Natural gas and Gold 27-31 Dec

As the long weekend due to the holiday is about to end, we are at the threshold of another short week, which is expected not to stir up too many news items.

Here is a weekly outlook for the week of December 27th to 31st showing the main news items and reports that will be published this coming week mainly about the US and EURO economies; This forecast will provide some insight on how the prices of major commodities such as oil and gas prices might be affected from these news items. The repots include the following (all times GMT):

  1. Monday 27th of December tentative (postponed indefinitely) – Publishing the US Treasury Currency Report by the Department of Treasury: This report which is published twice a year provides information and analysis such as economic policies and economic conditions, on the US and major countries. Last time the report (July 2010) showed that the US is still on a high unemployment rate of 9.5%, however it did show an economic growth of an average 3.5% per quarter (annual basis), which was higher then the weighted-average of 2.4% of the other G7 countries. This report could provide insight into the economic growth and stability of major countries and thus inform us how their condition could affect commodities prices. For the previous report check in this link;
  2. Wednesday 29th of December 9.00AM – Monetary developments in the euro area: This monthly report shows the changes in M3, M1 and loans to private sector in the Euro area. This upcoming report will refer to the month of November. In the last report about October, it presented an annual growth rate of 1% for M3, a small decline compares to 1.1% annual rate in September. On the other hand, the annual growth rate of loans to private sector rose from 1.2% in September to 1.4% in October. These data show a rise in economic activity along with a small potential decline in the inflation in the Euro Area (see here the last report);
  3. Thursday 30th of December 13.30PM – Department of Labor report about US unemployment claims: The weekly report will show the unadjusted and seasonally adjusted data of last week’s unemployment claims. For the week ending on 18th of Dec, the report showed a decrease in initial claims of 3,000, settling on 420,000 claims; and for the week ending on 11th of Dec there was a decrease of 0.1% compare to the previous week, and reaching 3.2% for insured unemployment; furthermore, the number of insured unemployment for the week of Dec 4th was 4.064 million, a decrease of 103,000 compare to the previous week. This is one of the indicators for the US economy’s condition; if the report this week will continue to show some progress and recovery in the US economy, it could provide a signal for investors to reconsider investing in the US; consequentially, this might increase the value of the US dollar compare to major currencies and thus reduce the appeal of commodities such as gold and crude oil as an investment and thus decrease their price.
  4. Thursday 30th of December 15.00PM – US pending home sales: The pending home sales index, is a forward looking indicator that measures housing contract activities. The last report showed that home sales rose by 10.4% compare to September, however this index is still lower by 20.5% compare to October 2009. This indictor could provide a signal on the recovery progress of the U.S economy (see here the last report);
  5. Thursday 30th of December 15.30PM – EIA report about natural gas storage: The EIA will issue its weekly report about the changes in storage and consumption in the US of natural gas in cubic feet compare to the last couple of weeks seeing that last week the EIA didn’t issue its weekly report because of the holidays (see here to read my previous review on last week’s report). The Underground Natural Gas Storage showed in its last report from two weeks back a decrease of 4.4% compare to the previous week, reaching 3,561 (Billion Cubic Feet) for all lower 48 states. This report presents relevant information not only on the natural gas market in the US, but also in Canada (a major player in this market). As expected for this cold season, there was a rise in demand of Natural Gas for heating purposes as temperatures in Northeast US fell for the months of November and December; however, in the last couple of weeks natural gas prices didn’t rise, and if any, they fell probably due to the high storage levels and good supplies;
  6. Thursday 30th of December 16.00PM – EIA report about Crude oil inventories: The EIA (Energy Information Administration) will issue its weekly report on the US crude oil & petroleum related products (such as gasoline and propane) inventories and consumption of the passing week. These data will provide insight to the shifts in demand and supply for crude oil in the U.S. and how these shifts affect crude oil price. Last week’s report showed a fall of 0.3% in crude oil stocks, which is a drop of over 6 million barrels of crude oil. As the winter progress we will probably continue seeing a decline in crude oil stocks. This might explain the recent moderate rise in crude oil price as there is ongoing decline in crude oil stocks in the U.S. (see read my previous review on crude oil stocks);
  7. Friday 31st – New Years!

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