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
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...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
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...
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...
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