2020-06-05 • Updated
Investors await the OPEC+ decision on output cuts. It will define where the oil price will go.
The oil market was completely destroyed this year. The coronavirus outbreak forced all the people to stop travelling, driving their cars and factories to shut down. As a result, the oil demand crashed. Moreover, Russia rejected the OPEC’s proposal to cut supply to stabilize oil prices amid the coronavirus crisis. That leaded to some kind of a competition between Russia and Saudi Arabia: “Who will pump more oil?”. The effect was devastating – oil prices fell below 0. Finally, OPEC+ members agreed on output cuts and oil prices bounced back.
Firstly, lockdowns eased and the oil demand recovered a little bit. Secondly, oil producers have made significant output cuts. Eventually, oil prices have rebounded, but they are still well below the pre-crisis levels. The main catalyst for the oil prices’ growth will be the OPEC+ meeting tomorrow. Most analysts highly expect its members to continue supply cuts. Also, it’s not only important how much oil barrels they will decide to cut, but also for how long they will extend their agreement.
There are some doubts about the alliance’s decision. Firstly, investors were afraid that Russia may refuse to extend cuts. However, Russia’s Energy Minister Alexander Novak reassured them as he claimed that Russia is open for next cuts. The problem now is the OPEC’s second largest producer, Iraq as it reached only 42% compliance. And, other members won’t be interested to cut supply unless Iraq abides the agreement.
Moreover, the US NFP data was better than analysts expected. It improved the market sentiment and oil prices surged in a wave of a global optimism. That also means, that economies are recovering after the coronavirus damage and the oil demand will soon come back to its previous levels.
Let’s look at the Brent oil chart. The price is headed toward the retracement level at $45 near the 50% Fibonacci level. If the Brent price crosses it, it will clear the way towards the key level at $51.5 where the 61.8% Fibonacci level meets the 200-day moving average. Support levels are 39 and 36.
Follow OPEC+ decision tomorrow and remember that to trade Brent with FBS you need to choose BRN-20N.
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...
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...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
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...
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
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!
|
