Crude Oil/Brent Oil Monthly October Forecasts

Crude Oil  was weak most of the month on lower demand and high production with a global glut. The commodity closed at 91.16 after climbing back above the $94 level and then crashing as the markets closed for the month.

Brent Oil  dipped from over $100 to close at 94.98 near its weakest point of the month as OPEC production levels continued to grow and demand weakened. Traders paid little attention to the geopolitical situation and more towards the economic recovery of the US. This would normally increase demand, but production in the US continues to soar to record highs as shale facilities produced record levels of oil. Oil is expected to trade in a range as OPEC will not meet to review production quotas until November.

After rising for four months, the Conference Board index — a key barometer of US consumer confidence — fell to 86.0 in September from 93.4 in August on mounting concerns about the jobs market. Consumer spending is a key growth driver in the world’s biggest economy and any dip in the index indicates weak demand. But analysts said other economic indicators remain strong.

The drastic drop of the oil prices has coincided with the highest bullish trend by the US dollar, vis a vis the basket of hard currencies, since four years ago, and the highest against the euro since two years ago.

Noticeable rise of supplies from the Middle East, Africa and the United States contributed to the bearish trend of the crude prices; a factor that has also alleviated fears with respect of forecast disruption of the oil supplies from these regions, currently gripped with dramatic political and military conflicts.