Friday’s oil rig counts were higher than expected, while traders are still a bit unsure if OPEC and Russia can pull off their production cuts, allowed oil to fall 2.4%. Even though global stockpiles have fallen dramatically, the unknown on the horizon is how much the U.S. shale industry can pick up the pace? Experts believe that North America, particularly the U.S. will be totally self-sufficient, which it is already, and will not have any need to import oil at all. This leaves OPEC and Russia in a difficult predicament, and its days of undercutting prices in order to put the U.S. shale producers out of business has failed. The UK Treasury has lowered its growth estimate for the UK from 2% to 1.5% — a fairly significant decline. More importantly, this indicates that economic models continue showing a negative Brexit impact.
Expect oil prices to stay above $50 USD for some time.
Support Resistance
USDCAD 1.2738, 1.2728, 1.2718 1.2773, 1.2798, 1.2806
Prior Actual
US: New Home Sales October 645K 685K
XE Reports:
Good news continues. The ECB’s latest analysis of the EU economy shows a region with an accelerating expansion. Australia is growing as well. Although the latest GDP revision pointed toward a solid expansion, the Treasury department issued a sharp downgrade for future growth.
The ONS released the second estimate of UK GDP for the third quarter, which was an unrevised .4% increase. The business sector breakdown had services rising .4% (3 of 4 sectors rising), production advancing 1.1% (all 4 sectors increasing) and construction contracting .9%. Using the more traditional breakdown, household expenditures rose .4% while investment increased .5%. However, all is not “peaches and cream.”
There was a smattering of other news. Canadian retail sales were up .1%. But without gas sales, these declined .2%. It also appears that on an inflation-adjusted basis, Canadian retail activity is now in a modest decline.
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