Oil market overview

Oil market overview

2019-11-11 • Updated

At the weekend, a joint committee of energy ministers from OPEC and non-OPEC oil producing countries pledged to consider extending output deal cut for additional 6 months.

Venezuela’s Oil Minister Nelson Martinez supported the idea of deal extension. Iraq, Algeria, and Angola also said that they would back a prolongation of the deal.  Mohammed Al Rumhy, energy minister of non-OPEC producer Oman, said that a further extension of the supply reducing deal looks expedient. Kuwait was the first nation calling for the extension of output cut agreement.  

The biggest OPEC supplier Saudi Arabia has indicated that it won’t be against the prolongation of the agreement if global crude oil stockpiles remain above their five-year average.

There are several factors that undermined the effectiveness of the November supply reduction deals: low seasonal demand, refinery maintenance, rising non-OPEC supply (the recent estimate of compliance rate of the non-OPEC members reached 64%). A further extension of the deal could be a rational decision once the impact of aforementioned factors is eliminated.

Russia Energy Minister Alexander Novak said that the country is not ready to support a possible extension of oil supply cuts in the second half of the year, even if the majority of oil suppliers acknowledge their contribution to the reduction of global oil stockpiles. He also said that Russia won’t make any pledges until April as it needs more time to assess the oil market, inventories and US drilling activity and non-OPEC countries’ production.  This was a massive drag for oil prices.

An additional factor that led to the quotes’ downfall was Baker Hughes rig count data released last Friday. It revealed that the number of active US rigs drilling for oil increased by 21. It was the tenth weekly increase in a row.

Brent oil futures slumped to $50.60 in the opening hours of Monday’s session. 

Similar

Oil: Russia-Ukraine Crisis Could Boost Oil Prices
Oil: Russia-Ukraine Crisis Could Boost Oil Prices

Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...

WTI and Brent React To a Key Pivot
WTI and Brent React To a Key Pivot

Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...

Latest news

USD: Powell Speaks on Cutting Interest Rates
USD: Powell Speaks on Cutting Interest Rates

Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...

WTT: Currency Pairs To Trade In April
WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera