ebf301_ff9_fon5018 - FatinNorAzizi CrudeOilScenarios...

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Fatin Nor Azizi Lesson 9 ­ 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 A couple of arctic air will blast and potentially snow toward portions of the midwestern and northeastern United States during the first week of April. Since it is supposed to be Spring, many people are looking forward to increase outdoor spring activities. This will cause more people to get out and about to many places, accidents may occur, transportation rate increases, and the usage of gasoline increase as well for standby rescue and other rescue missions. Hence, price of crude oil will increase due to higher demand and usage. Source: heastern­us­great­lakes­early­april/56335323 2. Domestic Economy ­ Bullish According to Barrons, there is an increase in global consumption of grain that is expected to lift prices for wheat and corn. Growing conditions were so favorable in the past few years for wheat and corn that the production outstripped demand, sending the stockpiles higher. Due to these reasons, transportation for delivery and production has increased, eventually, increasing the amount of crude oil used for transportation. This will increase the price in the upcoming months. Source: 58970109 3. Global Economy ­ Bullish Last month, a critical pipeline in Nigeria was bombed, taking around 250,000 barrels of crude oil offline until May. The fueling of crude oil price spike up due to terror attacks on oil facilities. Extremist groups pose a threat to energy facilities especially those in oil­rich North Africa. Investors are also predicting that the US production will decline sharply in 2016. This
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