2020-05-29 • Updated
Oil prices have been climbing up for a long time. What have stopped them?
First of all, prices fell on Wednesday after the API reported a surprisingly large crude build. It was reported an 8.7-million-barrel build, while analysts expected a 1.9-million-barrel draw. On Thursday US commercial crude oil inventories rose by 7.9 million barrels from the previous week. However, fuel demand remained weak. That disappointed many bullish investors as they hoped the oil demand would increase in the USA due to the Memorial Day weekend and easing lockdowns all over the world, but it didn’t improve as much as they thought. There are many doubts when the oil demand will return to its pre-crisis levels. Things are not so bad. For instance, Morgan Stanley reported that the demand will significantly rebound by the fourth quarter this year.
Oil prices are really sensitive to the whole market mood. Today investors are a bit confused as US-China relationship got worse ahead of Donald Trump’s press conference on Chinese actions. China imposed a security law in Hong Kong and, by that, threatened its autonomy, freedom and placed it at risk to lose its title of a financial hub. As a result, oil prices have started to ease off today.
According to OPEC+ agreement, all its members will cut the oil supply during the whole June. Saudi Arabia and some other OPEC members insist on extending output cuts of 9.7-million barrels per day beyond June. That's all well and good, but... Russia may reject this proposal as Russia’s largest oil producer, Rosneft, is struggling to supply its long-term buyers with crude oil. Also, Russian firms argued that these oil supply cuts just support the US shale production with higher oil prices, what gives the US oil producers a larger piece of the global oil cake at the expense of Russia and its OPEC allies. But, maybe OPEC will manage to get a Russian support.
Let’s look at the WTI oil chart. The price has been increasing since April 28. Then the price entered the horizontal corridor on May 18. From that moment, it has been trading in a range from 31.5 to 35. If the price crosses the support line at 31.5, it may dip down to 27. Resistance levels are 35 and 37.5.
To trade WTI with FBS you need to choose WTI-20N.
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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