The oil cartel completed its teleconference on Tuesday. WTI spiked above $63.
OIL: the biggest drop since Gulf War
Oil slumps 31%, down to pre-OPEC+ level, the worst drop since 1991
Are you sure, you want to see this? Ok, you asked for it.
Since 1991, observers say, oil hasn’t made such a steep drop in one day – 31%. Brent, particularly, trades now at $31, having been at $51 just on Thursday. Well, on Thursday the OPEC+ meeting in Vienna took place – and that was a disaster. For who exactly, we are yet to see, but in general, we can say “goodbye” to oil market stability in the nearest future.
Cutting it short: the main question of the cartel's meeting was the reduction of oil output to support the price, the ball was between Russia and Saudi Arabia. Russia disagreed. Moreover, the current output cut agreed in December expires this quarter. Moreover, Saudi Arabia promised to significantly raise its production. As a result, there will be an oversupply of oil and this during the time when the demand for the commodity is weakened by the coronavirus.
Many say it is the beginning of a price war. There are obviously politics involved, very intensely. For trading, that means big volatility. The good thing is that with FBS traders can open both buy and sell trades in oil. As a result, there are now even more profit opportunities than before. We will keep you informed and get back with deeper analysis.
The United States will release retail sales and producer inflation (PPI index) numbers at 15:30 MT time on June 15.
Gold has plunged amid the stronger US dollar as investors await the Fed’s meeting this week.
All eyes are turning to the Federal Reserve and the US dollar. How to trade XAU/USD, EUR/USD, and GBP/USD?