Oil: OPEC upscaling the supply
OPEC+ - unexpectedly - decided to gradually increase back the oil supply. What's the outlook for the oil price?
Oil: no easy way back
Information is not investment advice
What are the forecasts for the oil market? Is there any hope of a recovery?
What happened?
The International Energy Agency decreased its forecasts for the oil market on Thursday. Indeed, the coronavirus ruined the oil demand. Therefore, the Agency can’t give any optimistic guidelines. You might think that international borders have opened, and all the people, that waited for so long, broke out travelling. However, according to official data, there is still a low demand for jet fuel. Many countries have recently recorded fresh virus outbreaks, especially Europe and Latin America, where the coronavirus is spreading at a quite high speed.
Things are not so terrible as it may seem, OPEC+ members made all efforts to contain the prices at the current levels for almost two months. They have made enormous cuts of oil production, which pushed oil prices a little bit higher. Nevertheless, the prices are still well below pre-crisis levels, and they are unlikely to fully rebound soon.
Moreover, Libya’s port blockade will keep the North African’s crude oil out of the world market. Libya's oil export terminals are occupied. Therefore, it should help with the world’s supply glut. According to Bloomberg, Libya’s oil production dropped by 40% since July. It’s anticipated to be 1.2 million barrels in August. On the one hand, this blockade has made the devastating damage on the whole Libyan economy. On the other hand, it may decrease the world’s oversupply and push oil prices higher.
Technical tips
The Brent oil is slowly moving upward. There is the strong resistance at 200-day moving average at $46.50. It’s more likely the price will bounce off this resistance. However, if it manages to break it out, it will open doors to the key psychological mark at $50.00 at the 61.8% Fibonacci level. Sooner or later it should reach this level. Support levels are $43.50 and $42.00.
Important! To trade Brent oil with FBS you need to choose BRN-20V.
Kseniya Medik
Similar
EUR/AUD looks down
EUR/AUD rose to 1…
Cable climbs to fresh two-month high
US stock markets are set to open mixed as the post-Pfizer rally is reassessed, but cyclicals are still clearly outperforming the growth and momentum names that have notched the biggest gains during the pandemic.
Popular
Westpac: Bullish rally of the AUD is inevitable in Q3
According to Westpac, the AUD is undervalued. What target do they set?
NZD/USD : extends gains to fresh three-week high.
Ichimoku Kinko Hyo EUR/JPY: The pair is trading above the cloud…
AUD/USD : climbs to three-week high as dollar continues to stay pressured.
Ichimoku Kinko Hyo USD/JPY: The pair is trading below the cloud…
Choose your payment system
