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...
Oil market overview
2019-11-11 • Updated
Crude oil edged down in a subdued trading on Monday as investors are still digesting expansion of the US crude oil production.
Benchmark Brent crude futures fell to $55.66 from its last-week high of $56.65. US West Texas intermediate crude futures were down to $52.95 after rising to $53.75 last week.
Baker Hughes officials said on Thursday that drillers added 11 oil rigs in the week of April 13. According to the recent information of the Energy Information Administration, the US crude oil production has grown to 9.4 million barrels per day, making the US the third largest producer after Saudi Arabia and Russia. Cost-cutting technological advancements helped US firms to become more competitive in areas previously reserved solely by such large producers as BP and Exxon Mobil. Field works in Arctic lands and waters make OPEC and non-OPEC signatory parties of the output cut deal more nervous about their market shares in the futures. Despite growing opposition from numerous environmental groups and President Obama’s 2016 ban on drilling in Artic waters, exploration in Alaska managed to reveal massive volumes of oil. The following wave of Artic development might influence the oil prices in the long-term future.
Political tensions in the Middle East (airstrikes in Syria), unplanned outages in Libya resulting in the shutdown of the Sharara oil field contributed to the recent uplift in oil prices. The possibility of extension of output cut deal was an additional tailwind for crude oil futures in the past two weeks.
Next month, OPEC countries and their allies will gather together to decide whether to extend an agreement curbing oil production or not. It will be a difficult decision to make as the signatory parties are facing a lose-lose situation. If they fail to agree on the deal extension, the oil market will be oversupplied and oil prices tumble. If they manage to strike a deal, prices will likely hit higher levels offering the US oil producing industry a scope for further expansion.
So, without the cut deal, the bull market is poised to fade away, with Libya reopening its oil field after outages, geopolitical tension easing and flourishing oil industry in the US.
Amid uncertainty driven by geopolitical events, oil prices surged to record highs. However, a correction in oil prices is observed with a gradual improvement in the situation in the Middle East and an increase in demand. The question facing investors is whether there are prerequisites for further price growth or if everything depends on the dynamics of the political landscape. In this article, we will explore the impact of recent events on the global oil market and the prospects for developing this crucial commodity sector.
The energy industry has undergone several major changes in the XXI that are becoming increasingly apparent…
Bullish Scenario: Buys above 17910 with TP:18098.07, TP2:18277, and TP3: 18415 Bearish Scenario: Sells below 17850 with TP1:17730, TP2: 17700
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