
US oil exports reached a record last week at five million barrels a day, according to Energy Information Administration data…
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
US oil exports reached a record last week at five million barrels a day, according to Energy Information Administration data…
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.
The oil prices rally and world central banks’ dovish monetary policy caused by the Covid-19 pandemic were the main reasons for current inflation growth…
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.
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.
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?
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