G20: what did the leaders decide?
The G20 summit took place in Bali, Indonesia, on November 2022…
2020 is the worst year in oil history
Information is not investment advice
Coronavirus and massive oil oversupply was a once-in-a-generation coincidence. Is the worst over?
What’s happening?
This year has been really tough for most industries. However, the oil sector was the most affected. The coronavirus forced countries to shut all factories and people stay at home. That in turn reduced the oil demand enormously. The International Energy Agency revealed that the oil demand was 17.8 million barrels per day lower in comparison with the same period last year. Moreover, two oil giants: Russia and Saudi Arabia couldn’t agree to cut oil supply in time. As a result, the oil market crashed and oil prices even fell below zero in April. At the same time, oil showed the best performance in the second quarter(Q2) in over 30 years. It managed to grow to $40 a barrel. Brent crude oil futures surged more than 80% in the second quarter. US West Texas Intermediate futures rose by 91% in the Q2. However, despite that rebound, oil prices are still well below pre-crisis levels.
What’s next?
According to Stephen Brennock, oil analyst at PVM Oil Associates, the rest of the year may bring new downturns to the oil market. US president elections and fears of the second virus wave may deteriorate the market sentiment, that can push oil prices down again. In addition, OPEC+ is already considering to ease oil cuts, that could weigh on oil prices, as well. Energy giant producers BP and Shell gave dire perspectives - they both expected the full oil recovery just to 2050. Those forecasts are too much negative. For example, Commerzbank reassured that OPEC+ would have the oil market under control, even if the fresh coronavirus outbreak happens. Moreover, the demand is slowly recovering together with the global economic reopening. Also, crude oil inventories came better than analysts expected. They contracted by 7.2 million barrels, while the forecast was only the 900 000 drop.
echnical tips
Let’s look at the WTI oil chart. The encouraging oil report pushed the price upward. If it breaks through the high of June 22 at $40.5 a barrel, it will clear the way to the next resistance at the 200-day moving average at $44. The next resistance will be at $47.5. Support levels are $38 and $36. Follow further news!
To trade WTI with FBS you need to choose WTI-20Q.
Similar
The End of Era: What Might the UK Face Next?
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
Why didn't oil prices calm despite OPEC+ attempts?
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Popular
Will USDJPY slide lower in 2023?
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?
BoC Rates Could Alter The Trend on USDCAD and others
Today, at 5:00 pm (GMT +2), the Bank of Canada will publish the Overnight Rate, which represents short-term interest rates, and is pivotal to the overall pricing of the Canadian Dollar in the global markets. Let's look at how the markets are faring ahead of the BoC rates release.
MSFT faces gloomy forecasts ahead of earnings report
In a call scheduled for January 25, 00:30 am GMT+2, Microsoft will publish the company's earnings for the final quarter of 2022 and comment on the results, projections, and outlook for the nearest future of the company.
Choose your payment system
