WTI/USD – US Crude Unchanged as Durable Goods Shines, Jobless Claims Rises

US crude is showing little movement in the Wednesday session. In North American trade, WTI/USD futures are trading at $48.03. Brent crude futures are trading at $49.12, as the Brent premium has widened to $1.09. On the release front, the markets have plenty of data to digest. Core Durable Goods Orders rose 1.0% and Durable Goods Orders jumped 4.8%, as both indicators easily beat their estimates. UoM Consumer Sentiment climbed to 93.8, above expectations. However, other indicators were not as positive. Unemployment Claims were higher than expected, at 251 thousand. New Home Sales slipped to 563 thousand, well below the forecast. Later in the day, we’ll get a look at the FOMC minutes from the November policy meeting.

Oil prices have surged 9.8% in the past week, and US crude briefly climbed above the $49 line on Tuesday. This marked its highest level since the end of October. Much of the spike can be attributed to expectations that OPEC will reach an agreement with non-OPEC countries to cap production and boost weak oil prices. The oil exporters will meet in Vienna on November 30, and if an agreement is reached, oil prices could surge upwards. Heavyweights Russia and Saudi Arabia are on board, but Iraq, Libya and Nigeria have all asked to be left out of a deal which would require production cuts. Previous attempts to reach a cap agreement have ended in failure, and it’s questionable whether this time will be any different. Given the uncertainty as to whether an agreement will be reached, we could see volatility in oil prices ahead of next week’s summit.

OPEC Deal Next Week Still Facing Doubts from Iran and Iraq

The US dollar has posted broad gains in November and with a rate hike in December a near-certainty, sentiment towards the dollar should remain high. However, with a Trump administration taking over the reins, what will happen in early 2017 is a big question mark which could translate into volatility in the markets. Trump’s election promises of more spending and less taxes have been vague and we will have to wait for the new Trump administration to unveil a detailed economic platform. The Federal Reserve is in favor of gradual rate hikes next year, but this assumes that the US economy continues to strengthen. In testimony before a congressional committee last week, Fed chair Janet Yellen acknowledged the uncertainty created by Trump’s victory and said that the Fed might have to adjust its outlook, based on the new president’s economic policies.

WTI/USD Fundamentals

Wednesday (November 23)

• 8:30 US Core Durable Goods Orders. Estimate 0.2%. Actual 1.0%
• 8:30 US Unemployment Claims. Estimate 241K. Actual 251K
• 8:30 US Durable Goods Orders. Estimate 1.2%. Actual 4.8%
• 9:00 US HPI. Estimate 0.5%. Actual 0.6%
• 9:45 US Flash Manufacturing PMI. Estimate 53.6. Actual 53.9
• 10:00 US New Home Sales. Estimate 591K. Actual 563K
• 10:00 US Revised UoM Consumer Sentiment. Estimate 91.6. Actual 93.8
• 10:00 US Revised UoM Inflation Expectations. Actual 2.4%
• 10:30 US Crude Oil Inventories. Estimate 0.3M. Actual -1.3M
• 12:00 US Natural Gas Storage. Estimate 7B
• 14:00 US FOMC Meeting Minutes

*All release times are EST

* Key events are in bold

WTI/USD for Wednesday, November 23, 2016

WTI/USD November 23 at 12:20 EST

Open: 48.07 High: 48.41 Low: 47.41 Close: 48.03

WTI USD Technical

• WTI/USD showed little movement in the Asian and European sessions. The pair posted slight losses in North American trade before recovering
• 46.54 is providing support
• There is resistance at 52.22

Further levels in both directions:

• Below: 46.54, 40.57, 33.22 and 28.71
• Above: 52.22, 58.32 and 65.05

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