China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
How deep may pound dip?
2020-09-11 • Updated
The pound has slumped against other major currencies amid fears over the no-Brexit deal. More details have recently come out over EU-UK tensions. Let’s get into them straight away.
The European Commission claimed on Thursday that it would give a deadline up to the end of September to the United Kingdom to back out the Internal Market Bill (IMB), which violates the initial EU-UK agreement, reached in 2019. If the UK doesn’t withdraw the bill, the EU will take legal action. Further negotiations will continue next week.
The main sticking point is Northern Ireland’s border. The initial agreement was created to avoid the need for a hard border between Northern Ireland and the Republic of Ireland. However, the new legislation, offered by Boris Johnson, may undermine it. The EU threatened the UK with financial, agricultural, and trade sanctions. Nevertheless, the UK Prime Minister stay confident to pass the bill, shrugging off the EU’s disagreement. As a result, the GBP is falling amid Brexit uncertainties.
Elsewhere, the mixed data from the UK came out today. Construction output, industrial, manufacturing production, and GDP exceeded expectations, while goods trade balance and index of services came out worse than the forecasts. Let’s look at the charts.
The yesterday ECB statement underpinned the euro, which led to huge swings on the EUR/GBP chart. The pair has approached the resistance of 0.9300. If it manages to break it, it will surge to the March high of 0.9415. In the opposite scenario, if it falls below the low of March 23 at 0.9150, the way to the key psychological mark of 0.9000 will be clear.
Besides, there are large bearish movements on the GBP/CAD chart. The move below the low of June 19 at 1.6750 will drive the pair down to the March low of 1.6600. Resistance levels are at the key psychological mark of 1.7000 and the strong resistance of 1.7200, which it has failed to cross in the June-July period.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.