The G20 summit took place in Bali, Indonesia, on November 2022…
Oil rally takes breath
Information is not investment advice
Oil prices have been climbing up for a long time. What have stopped them?
First of all, prices fell on Wednesday after the API reported a surprisingly large crude build. It was reported an 8.7-million-barrel build, while analysts expected a 1.9-million-barrel draw. On Thursday US commercial crude oil inventories rose by 7.9 million barrels from the previous week. However, fuel demand remained weak. That disappointed many bullish investors as they hoped the oil demand would increase in the USA due to the Memorial Day weekend and easing lockdowns all over the world, but it didn’t improve as much as they thought. There are many doubts when the oil demand will return to its pre-crisis levels. Things are not so bad. For instance, Morgan Stanley reported that the demand will significantly rebound by the fourth quarter this year.
Overall market sentiment
Oil prices are really sensitive to the whole market mood. Today investors are a bit confused as US-China relationship got worse ahead of Donald Trump’s press conference on Chinese actions. China imposed a security law in Hong Kong and, by that, threatened its autonomy, freedom and placed it at risk to lose its title of a financial hub. As a result, oil prices have started to ease off today.
According to OPEC+ agreement, all its members will cut the oil supply during the whole June. Saudi Arabia and some other OPEC members insist on extending output cuts of 9.7-million barrels per day beyond June. That's all well and good, but... Russia may reject this proposal as Russia’s largest oil producer, Rosneft, is struggling to supply its long-term buyers with crude oil. Also, Russian firms argued that these oil supply cuts just support the US shale production with higher oil prices, what gives the US oil producers a larger piece of the global oil cake at the expense of Russia and its OPEC allies. But, maybe OPEC will manage to get a Russian support.
Let’s look at the WTI oil chart. The price has been increasing since April 28. Then the price entered the horizontal corridor on May 18. From that moment, it has been trading in a range from 31.5 to 35. If the price crosses the support line at 31.5, it may dip down to 27. Resistance levels are 35 and 37.5.
To trade WTI with FBS you need to choose WTI-20N.
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.