2020-04-06 • Updated
After the failed meeting of OPEC+ on March 5, which essentially fell apart on that day, WTI oil plunged to the range of $25 per barrel and recently touched $20. So far, that mark has served as a bottom point for the black gold in the context of the price war, decimated global demand and an increasing oversupply. Recently, however, the US President Donald Trump called on Saudi Arabia and Russia to come to an agreement and announced an expected (or rather hoped for) 10 to 15mnl bpd slash of the global oil supply. That immediately pushed the oil price up to the current level $27 per barrel. No real action has ensued, however. The situation is left hanging in the air – as well as the oil price is.
Everyone is at home, waiting for the US to step in, basically. That is hardly an exaggeration if even Bloomberg says the following:
Facts are as following: last week, Donald Trump gave another press conference where he informed that Russia and Saudi Arabia were reportedly one step away from striking a deal to cut the specified 10-15mln bpd (“or even more”, as per the US President). Later on, we received information that the OPEC+ telephonic/remote meeting was planned for this Monday. A while later, it was announced that this meeting is rescheduled to Thursday, with no exact figures or promises from either Russia or Saudi Arabia. Therefore, on the surface, the picture is that both countries are ready to make a deal and willing to negotiate, but only with the participation of the US specifying how much of American oil supply will be cut. And the latter, as Bloomberg rightly pointed out, doesn’t seem to be moving forward.
Observers, however, inform that Russia and Saudi Arabia, as eventually OPEC+, do not really need US participation to make a deal. The questionable idea is whether the two countries were really planning to keep the oil price at $20 to drive the US shale oil industry out of business. In reality, even $50 per barrel was not enough for the US shale to make it to the next level so there is no need to have it at $20. In fact, the disastrously low oil price pushing small American oil businesses into oblivion just leaves more room for giants like Exxon to take over their remainders once they die and expand it back and even beyond, but with a firmer grip. That’s why a theory of Russia/Saudi Arabia pressing on the oil price to press on the US shale is likely just a theory. Why are we here then? Probably, we will never know for sure, unless Donald Trump, Vladimir Putin, or Mohammed bin Salman express their will to share with us their private conversations. We are yet to see, though, if the deal gets sealed this Thursday.
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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