OIL: OPEC's battle

OIL: OPEC's battle

2020-02-27 • Updated

Key indicators

Performance in 2020: -23%

Last day range: $52.50 – $53

52-week range: $52.50 - $75

Oil’s breakeven price

Next Thursday, OPEC will hold its extraordinary (meaning, urgent) meeting in Vienna. Why? Because to many oil-exporting countries from the Middle East (they make the bulk of OPEC) such as Saudi Arabia, $50 per barrel is approximately the breakeven price. That means, the current price of oil leaves little room for those countries to extract as many profits as were planning for – if any. Hence, the urgency of the meeting.

That gains even stronger momentum as there are larger disagreements within the OPEC+ (where Russia is a key player) about further cutting the supply, which is the main (if not only) lever the cartel can use to support the oil price.

Very probably, the dynamics of the global Coronavirus spread outside China will strongly impact the decision to be taken at the meeting on March 5. And the intrigue is: although the issue becomes clearer with China itself (infection pace decreases, projections for confident virus containment are set in mid-April), what about the rest of the world, especially the US? We are yet to see that. As well as Mohammed Barkindo, OPEC Secretary-General.

One thing is for sure: OPEC will use all means to stop the oil price slumping. If we hear strong measures announced by Mr. Barkindo in line with confident virus containment plans by the global community by next Thursday, very likely oil (Brent, in our chart) will get back to $60-70$ channel of movement.    

Technical levels

Resistance $60

Support $50

Brent_OilWeekly.png

                                                                                      LOG IN

Similar

What Can Drive Oil below $90 a Barrel?
What Can Drive Oil below $90 a Barrel?

The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.

Latest news

Best Instruments to Trade This Week
Best Instruments to Trade This Week

This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.

European Currencies Ahead of the Banks' Statements
European Currencies Ahead of the Banks' Statements

On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.

Will the FOMC Surprise the Markets?
Will the FOMC Surprise the Markets?

The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?

Deposit with your local payment systems

Feel the Team Spirit

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!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

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