Week Looks Slightly Bearish for Oil: CNBC Survey

This week marks the start of a weekly CNBC oil market opinion poll. We survey traders, analysts and strategists asking them whether they're bullish, bearish or neutral on the oil market for the week ahead. Here are this week's results:

Total Responses: 13

  • Bearish: 7
  • Bullish: 5
  • Neutral: 1

(54 percent of respondents are bearish)

Key Bearish Factors

  • Continued buildup in U.S. fuel inventories as demand remains slack
  • Labor Day holiday marks end to peak summer season demand
  • Markets 'more exposed' to bad economic news

Key Bullish Factors

  • Hurricane season hasn't ended
  • Economic data may suggest worst is over, stocks may rally, dollar falls
  • Risk premium may build after attempted assassination of Saudi royal

Bearish factors:

Expectation that fuel stockpiles will continue to build as the peak summer driving season ends, traditionally at the extended Labor Day holiday weekend. Demand component of the inventory reports this week and the week after will give us an idea whether U.S. consumers are feeling more confident about spending or if they're still holding back.

"The US is going to be the last region of the world to see inventories draw as it saw the greatest demand destruction in 2008," Morgan Downey, commodities trader at Standard Chartered, said. "When US inventories begin to draw significantly, oil prices may be in the high $80s and the flat price move may be over."

There's also risk from U.S. economic data, a pullback in stock markets, a slew of important economic headlines including August's employment report on Friday and other key reports -- ISM manufacturing and non-manufacturing surveys, Fed minutes, monthly auto sales and the Chicago Purchasing Managers report.

"I think that current market pricing already factors in economic recovery, so the market is more exposed to unexpected 'bad' news," Commonwealth Bank Commidity Strategist David Moore said.

If payrolls disappoint we could see a sharp sell-off.

Bullish themes:

There's upside risk from hurricane season, which has so far been relatively tame with no immediate impact on production in the Gulf of Mexico. But the season isn't over yet.

"We are no way out of the woods with hurricane season (even heavy rains could cause power outages to refiners and damage pipelines-with 3 months left in hurricane season this is still important to remember)," John Licata, chief investment officer at Blue Phoenix, said.

Upbeat economic data is fuelling a continuation of stock market rally and the if data supports the view that the worst is over for the economy, then stocks will gain traction, the dollar will weaken and that will support commodities.

Dennis Gartman noted a possible rise in the risk premium after the failed assassination attempt of Saudi Arabia's deputy interior minister Prince Mohammed bin Nayef on Thursday escaped with light injuries. In response Saudi has tightened security at its oil facilities, the first known attack on a member of the royal family "shall tend to keep a bid under the market," Gartman said.