ebf301_ff12_fon5018 - FatinNorAzizi CrudeOilScenarios...

Info icon This preview shows pages 1–2. Sign up to view the full content.

Fatin Nor Azizi Lesson 12 ­ Fundamental Factor Crude Oil Scenarios Determine whether each scenario could have “bearish” (lower prices), “bullish” (raise prices), or neutral impact on the commodity prices. 1. Weather ­ Bullish Severe weather and flooding has not been limited to the Midwest. Several areas in the south were hard hit recently, including the city of Houston. Wind rip through the cities and leaving destruction in their path. This weather makes it hard to move around due to flooding and many property destruction. Cranes and other equipments are needed to help recover the property and this requires crude. Hence, price will increase. Source: 887 2. Domestic Economy ­ Bearish Consumer spending has been increasing at a rate of around 3% over the past year and is predicted to keep growing at the same pace in 2016. The GDP growth rate will remain within the 2­3% ideal range. Unemployment will continue at the natural rate. U.S. manufacturing is forecast to increase faster than the general economy. Production will grow 2.6% in 2016. The unemployment rate will be 4.7% in 2016. Overall the domestic economy will rise steadily so with the energy utilization. Thus, there will be an increase in the price and demand for the future crude oil. Source: 3. Global Economy ­ Bullish News is that the US oil benchmark settled above $40 a barrel for the first time in nearly three weeks as the dollar faded and hopes rose for a coming agreement among sovereign producers that would begin to reduce the global crude glut. The reason being mainly due to the softening dollar, US inventory declines and the meeting of oil producers would agree to freeze the output level. Forecasted that the price will remain increasing until the meeting takes place.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '10
  • SMALL
  • crude oil, pivot point, Market sentiment

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern