2020-09-02 • Updated
Oil prices are steadily growing as crude stockpiles have been declining for six weeks.
According to the report of the American Petroleum Institute, crude inventories declined by 6.36 million barrels last week, marking the reduction of oil supply. At the same time, manufacturing reports from China and the USA came out better than analysts expected, which in turn should positively impact the overall consumption and oil demand as well. However, investors have doubts that demand may drop in a few next months as China is planning to cut oil imports after a buying binge earlier this year.
“There is not a lot of meat on the bone right now to drive the market convincingly higher above $45,” said Stephen Innes chief market strategist at AxiCorp. He added that future recovery is still highly uncertain. Nevertheless, analysts from Fitch Solutions consider that oil-consuming may recover faster than the oil supply and, therefore, lead to higher oil prices in the near term. Even more, Goldman Sachs claimed Brent crude to reach $65 a barrel in the third quarter of 2021 due to the wide availability of the Covid-19 vaccine, which will boost oil consumption.
Returning to the issue of oil supply, Hurricane Laura led to a 53% contraction of the oil production in the Gulf of Mexico. In addition, analysts foresee that Venezuela’s oil supply may even drop to zero by 2021. IHS Markit has assessed that the country is generating around 100 000-200 000 barrels every day, and these numbers are declining. That also helped to reduce the oil glut. Elsewhere, it is said that Venezuela may not be capable to withstand the current pressure of all the rigors: record low oil prices, US sanctions, and economic downturn.
The golden cross has appeared on the WTI oil daily chart: the 50-day moving average (MA) has crossed the 200-day MA from the bottom up. It has created the bullish momentum. WTI oil prices have been already rising for 4 months in a row, but failed to stabilize above $43 so far. The move above $43.50 will open doors towards the psychological mark of $44.00 and then $45.00. Support levels are at the low of August 27 at $42.60 and at the low of August 21 at $41.60.
Follow crude oil inventories today at 17:30 MT time! If the report is better than expected, it will drive oil prices up. Otherwise – down. Stay tuned!
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...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
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...
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 ...
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.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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