Oil Price Fundamental Weekly Forecast – COVID-19 Demand Destruction Worries Move to Forefront

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures finished higher last week, helped by the possibility that OPEC and its allies could take action to stabilize or increase their production cuts, an unexpected plunge in U.S. stockpiles and an extremely weak U.S. Dollar.

Gains may have been limited by a steady rise in coronavirus infections and as the outcome of the U.S. presidential election remained unsettled as of Fridays close.

上周，腊WTI原油期货为$ 37.14操作步骤 - 结算，高达$ 1.35 + 3.77％和一月布伦特原油为$ 39.45，上升$ 1.99 5.04％

看多FactorsUS原油库存大幅下跌

US原油库存比前一周大幅下跌，作为风暴减产在墨西哥的美国墨西哥湾，而汽油库存增加，馏分油库存减少，能源情报署说，上周三。

原油库存下降的一周800万桶至10月30日，符合分析师的预期为增加89万桶相比。汽油库存增加了150万桶，符合分析师的路透调查预期为871,000桶相比下降。馏出物储存，包括柴油和取暖用油，下降1.6万桶，与对于2.0万桶平局预期，EIA数据显示。

原油产量下降600,000桶每一天1050万上周万桶，EIA称。股在库欣，对于美国原油期货俄克拉荷马输送毂上升936,000桶，EIA称。炼厂原油加工量增长了164000分，炼厂开工率上升0.7个百分点，EIA数据显示。

政治不确定性，划分国会施压于美元

投资者被押注民主党人拜登将成为下一总统但共和党人将保留参议院，这将使得难以控制为同盟传递较大的财花费他们一直在推动。

周五收盘，计票和趋势作为建议的共和党人准备保留美国参议院的控制权，而民主党将持有瘦身多数众议院。

该成果将在美国汽油和馏分油需求可能权衡，因为它可能意味着众议院和参议院将必须就财政刺激的妥协。

美元削弱，因为更小的比预期的财政刺激方案可能意味着美联储将必须提供更多的货币助剂。美元贬值可能推高以美元计价的美国石油海外需求，但如果欧洲压低需求增长COVID-19情况下，这将是一个延伸。

[FX-物品广告]看跌FactorsBig担忧欧洲的需求

帮助带动市场下为约需求破坏的担忧由于迅速上升数目的COVID-19案件周围世界。上周四，欧盟执行委员会下调了经济预期，并称经济不会反弹到前病毒水平到2023年。

{15} 此外，欧洲央行（ECB）副-President路易斯·德·金多斯周五表示，欧元区的增长可能会在第四季度负，随着各国力图减缓冠状病毒蔓延已经强加在过去几周内经济活动的新的限制。 {15 } 欧盟委员会下调了GDP预测预期2020和2021，因为感染的第二次浪潮。

与此同时，意大利记录了它的最高日感染人数在星期四和例激增至少120，276在美国，第二连续每日记录全国各地的爆发点差。

{18} 每周预测 {18 } {19} 总统选举的获胜者不再是猜测。拜登赢了，但特朗普总统将试图绑起来，结果在法庭上。拜登将上任一月份。{2}

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Last week, December WTI crude oil futures settled at $37.14, up $1.35 or +3.77% and January Brent crude oil finished at $39.45, up $1.99 or +5.04%.

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Bullish FactorsUS Crude Oil Stockpiles Fell Sharply

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U.S. crude oil stockpiles fell sharply the previous week, as a storm cut production in the U.S. Gulf of Mexico, while gasoline stocks increased and distillate inventories fell, the Energy Information Administration said last Wednesday.

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Crude inventories fell by 8 million barrels in the week to October 30, compared with analysts‘ expectations for an increase of 890,000 barrels. Gasoline stocks rose by 1.5 million barrels, compared with analysts’ expectations in a Reuters poll for a 871,000-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 1.6 million barrels, versus expectations for a 2.0 million-barrel draw, the EIA data showed.

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Crude production fell 600,000 barrels per day to 10.5 million bpd last week, the EIA said. Stocks at the Cushing, Oklahoma delivery hub for U.S. crude futures rose by 936,000 barrels, the EIA said. Refinery crude runs rose by 164,000 bpd and refinery utilization rates rose by 0.7 percentage points, EIA data showed.

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Political Uncertainty, Divided Congress Weigh on US Dollar

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Investors were betting that Democrat Joe Biden would become the next president but Republicans would retain control of the Senate, which would make it difficult for the Democrats to pass the larger fiscal spending they have been pushing.

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As of Fridays close, vote counting and trends suggested the Republicans were poised to retain control of the U.S. Senate, while the Democrats would hold a slimmed majority in the House of Representatives.

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This outcome would likely weigh on demand for U.S. gasoline and distillates since it would likely mean the House and the Senate would have to reach a compromise on fiscal stimulus.

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The dollar weakened because a smaller-than-expected fiscal stimulus package likely means the Fed would have to provide more monetary aid. A weak dollar could drive up foreign demand for dollar-denominated U.S. oil, but this would be a stretch if rising COVID-19 cases in Europe drive down demand.

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[fx-article-ad]Bearish FactorsBig Worries Over Demand in Europe

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Helping to drive the market lower were worries about demand destruction due to the rapidly rising number of COVID-19 cases around the world. On Thursday, the European Unions executive commission lowered its economic forecast, adding that the economy would not rebound to pre-virus levels until 2023.

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Additionally, European Central Bank (ECB) Vice-President Luis de Guindos said on Friday that Euro Zone growth will likely be negative in the fourth quarter, as countries have imposed new restrictions to the economic activity over the past weeks in a bid to slow the coronavirus contagion.

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The European Commission downgraded its GDP forecast expectations for 2020 and 2021 because of the second wave of infections.

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Meanwhile, Italy recorded its highest daily number of infections on Thursday and cases surged by at least 120, 276 in the United States, the second consecutive daily record as the outbreak spreads across the country.

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Weekly Forecast

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The winner of the presidential election is no longer a guess. Biden won, but President Trump will try to tie up the results in court. Biden will take office in January.

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With Bidens win, the U.S. Dollar is expected to remain under pressure, not only because of fiscal stimulus, but because the Fed is expected to try to keep the economy moving forward while the politicians debate the size of the stimulus package. This could help offset some of the demand lost from the rapidly spreading coronavirus.

The most important factors driving the price action at this time are COVID-related restrictions and growing expectations that OPEC and its allies would postpone bringing back 2 million bpd of supply in January given demand has been sapped by new COVID-19 lockdowns.

The charts indicate the downside could be limited because of a major support zone and the upside could be limited because any bullish moves by OPEC+ will likely be offset by a COVID-related issue. This could lead to a rangebound trade over the near-term.

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