EMEA Weekly Base Oil Report

Base oil prices continue to slide, with demand rated as poor and no sign of positives that might lift an otherwise dull market. The annual upswing in demand that normally precedes driving season has not yet materialized, and some sources have started to suggest that it may not this year if the market doesn’t begin to turn by the end of February or early March.

This ICIS World Base Oils & Lubricants Conference, scheduled to begin in a few days in London, is contributing to a particularly quiet week. read more

BRENT

Pivot: 65.90 Our preference: long positions above 65.90 with targets at 66.85 & 67.30 in extension. Alternative scenario: below 65.90 look for further downside with 65.10 & 64.40 as targets. Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Today’s Economic Events

09:30 UK DEC Unemployment Rate (ILO) exp: 4% prev: 4%
10:00 GE FEB Zew Survey (Current Situation) exp: 22.3 prev: 27.6
10:00 GE FEB Zew Survey (Econ. Sentiment) exp: -14.8 prev: -15
15:00 US FEB NAHB Housing Market exp: 58 prev: 58

General Market Comment

US markets were closed on Monday for Washington’s Birthday. The S&P 500 (2,775.60) stays above its 20d moving average (2,698.10 – positive slope) and 50d moving average (2,615.74 – flat slope).

European markets are expected to start on a flat note.

Foreign Exchange

The US dollar was mixed against all of its major pairs on Monday. Wall Street was closed for Washington’s Birthday.

The Euro was bearish against all of its major pairs. In Europe, according to Rightmove, the house prices in UK rose by 0.7% in February after a 0.4% increase a month earlier. read more

Today’s Economic Events

No major economic report scheduled.

General Market Comment

US indices closed higher to finish the week on Friday, boosted by shares in the Banks (+2.48%), Telecommunication Services (+2.33%) and Insurance (+1.89%) sectors. On the economic data front, the Empire Manufacturing index jumped to 8.8 in February (estimated 7) from 3.9 in the previous month. Import price index declined by 0.5% MoM in January (forecasted -0.2%) vs. -1% in December. Industrial production declined by 0.6% MoM in January (expected 0.1%) compared to 0.1% a month earlier. Finally, the University of Michigan sentiment index jumped to 95.5 in a preliminary estimate in February (estimated 93.7) from 91.2 in January. The S&P 500 (2,775.60) stays above its 20d moving average (2,698.10 – positive slope) and 50d moving average (2,615.74 – flat slope). read more

BRENT

Pivot: 64.20 Our preference: long positions above 64.20 with targets at 65.20 & 65.90 in extension. Alternative scenario: below 64.20 look for further downside with 63.30 & 62.90 as targets. Comment: the RSI advocates for further upside.

Today’s Economic Events

09:30 UK JAN Retail Sales (MoM) exp: 0.2% prev: -1.3%
10:00 EC DEC Euro-Zone External Trade Balance (M EUR) exp: NA prev: 18968
13:30 US FEB Empire Manufacturing exp: 7.3 prev: 3.9
14:15 US JAN Industrial Capacity Utilization exp: 78.7% prev: 78.73%
14:15 US JAN Industrial Production (MoM) exp: 0.1% prev: 0.4%
15:00 US FEB P U. of Michigan Confidence exp: 93.5 prev: 91.2

General Market Comment

US indices closed mixed on Thursday. Shares in the Food, Beverage & Tobacco (-2.07%), Insurance (-1.7%) and Diversified Financials (-1.17%) sectors closed lower while shares in the Media (+0.48%), Real Estate (+0.45%) and Technology Hardware & Equipment (+0.44%) sectors gained traction. On the economic data front, PPI final demand declined by 0.1% MoM in January (estimated 0.1%) vs. a decrease of 0.1% in December. In other news, initial jobless claims increased to 239k in week ended February 9th (forecasted 225k) from 235k in the previous week while continuing claims increased to 1.773M in week ended February 2nd (expected 1.74M) compared to 1.736M in the prior week. Also, retail sales fell by 1.2% MoM in December (forecasted 0.1%) vs. 0.1% in November. Finally, the Bloomberg consumer comfort index increased to 60 in week ended February 10th from 58.2 a week earlier. The S&P 500 (2,745.73) stays above its 20d moving average (2,691.11 – positive slope) and 50d moving average (2,616.04 – flat slope). read more

Today’s Economic Events

06:30 FR 4Q Unemployment Change (k) (QoQ) exp: NA prev: 22
06:30 FR 4Q Unemployment Rate exp: 8.8% prev: 8.8%
07:00 GE JAN Wholesale Price Index (MoM) exp: NA prev: -1.2%
10:00 EC 4Q P Euro-Zone: GDP (QoQ) exp: 0.18% prev: 0.2%
13:30 US DEC Retail Sales exp: 0.2% prev: 0.2%
13:30 US DEC Retail Sales less Autos exp: 0.1% prev: 0.2%
13:30 US JAN PPI – Ex Food & Energy (MoM) exp: 0.2% prev: 0%
13:30 US JAN Producer Price Index (MoM) exp: 0.1% prev: -0.1%
13:30 US W5 Initial Jobless Claims (k) exp: 225 prev: 234
15:00 US NOV Business Inventories exp: 0.2% prev: 0.6% read more