The G20 summit took place in Bali, Indonesia, on November 2022…
Goldman Sachs forecasts oil deficit
Information is not investment advice
Oil keeps rallying for the fourth day in a row after Goldman Sachs claimed that the oil market is in deficit and also because of the recent storm in the Gulf of Mexico, which led to the sharp decline of oil production. It is the best week for oil since June!
Analysts from Goldman Sachs anticipate that the oil market is going to be in a deficit of 3 million barrels per day by the end of the year. Moreover, they draw forecasts for Brent oil prices: $49 by the year-end and $65 by the third quarter of 2021. The Saudi Arabian energy minister cautioned traders not to consider selling of oil and even threatened that if they do so, they would be hurt “like hell.”
OPEC+ members held a meeting and agreed on reducing oil supply by 7.7 million barrels per day to try to artificially increase prices. Besides, OPEC claimed that it would take action, if some members continue disobeying the agreement to cut oil production to prevent the oil market from crash amid the coronavirus crisis. Saudi Arabia emphasized that it will do everything to sustain the recovery and therefore won’t allow any country to cheat on production quotas. This week, the International Energy Agency claimed that the United Arab Emirates broke its pledge to quotas last month as well as Iraq.
However, from OPEC+ view, the oil supply is not the main problem as it can regulate it. The sticking point remains the oil demand, which is out of the control of OPEC+. The demand recovery has slowed down recently amid rising new virus cases. Russian Energy Minister Alexander Novak anticipates global oil demand to rebound only in the second quarter of the next year.
WTI oil price is currently below the 50-day moving average near $41.00. If it manages to jump above the high of August 10 at $42.00, the way towards the next round number at $43.00 will be clear. In the opposite scenario, the move below the key psychological mark of $40.00 will drive the price lower to the support of $38.00.
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.