News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/7g9pB8D9xK
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/OCLzmXaDCu
  • Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/UZela9nSIm
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/7oqC3ykBbU
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/IgUIG55MbH
  • Supply constraints, rebounding global demand and rising inflation expectations may drive crude oil prices higher in the near term. Get your market update from @DanielGMoss here: https://t.co/ezPoAwcJt7 https://t.co/NMfk1cYSvE
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/OiRiBVeuzL
  • Crude Oil Prices Aiming Higher on OPEC Surprise, Inflation Expectations - https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/03/06/Crude-Oil-Prices-Aiming-Higher-on-OPEC-Surprise-Inflation-Expectations.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $CL #Crudeoil #OOTT #OPEC https://t.co/AKvXWX9DLQ
  • Given the size of the rally in the eleven months preceding the beginning of the current decline a broader sell-off looks warranted. Get your market update from @PaulRobinsonFX here: https://t.co/UxZiSulpwB https://t.co/raXvlzkGbV
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/lp0tmKS9WR
Oil Prices to Leak Lower as OPEC Look to Switch On Supply Taps

Oil Prices to Leak Lower as OPEC Look to Switch On Supply Taps

Justin McQueen, Analyst

Fundamental Forecast for Crude Oil Price: Bearish

Crude Oil Analysis and Talking Points:

  • Saudi Arabia and Russian Set to Turn the Supply Taps on
  • OPEC likely to relax production quota’s question is, by how much?

OPEC Preview: A Crude Awakening

OPEC’s 174th ordinary meeting is set to take place on June 22nd with the JMMC scheduled to meet the day before, while OPEC/non-OPEC ministers are due to meet on the 23rd. As we head to the meeting, expectations are for a relaxing of the current oil supply quota’s, which has been increasingly suggested by oil kingpins Saudi Arabia and Russia that the supply switch has been turned on. Both Saudi Arabia and Russia look to maintain market stability amid possible supply shocks from rapidly declining production from Venezuela and potential production losses from Iran (following US withdrawal from nuclear deal), while demand growth remains robust as evidenced by reports from the EIA, IEA and OPEC. Additionally, compliance among OPEC members is over 160%, largely due to declining Venezuelan production.

Oil Prices to Leak Lower as OPEC Look to Switch On Supply Taps

Source: Thomson Reuters (OPEC Production & Compliance)

President Trump Pressuring OPEC

Another reason for the consideration to raise production has been due to the mounting pressure from President Trump, who has been critical of OPEC, stating that they are artificially keeping oil prices high. Trump’s request comes in the context with domestic gas prices at near 4-year highs ahead of the summer driving season.

Unity Seemingly Gulfs Apart

Various oil ministers, most notably from Iran, Iraq and Venezuela, have been somewhat critical over raising production amid the request to do so from President Trump. However, despite this, Saudi Energy Minister remains optimistic that an agreement on a gradual increase of output will be inevitable.

The question is, by how much will oil production be boosted? Non-OPEC member Russia have proposed that oil output is increased by 1.8mln bpd (essentially exiting current supply pact), while Saudi Arabia and most likely the majority of the camp will prefer to boost production around 500k-700k bpd to offset Venezuela’s falling output. Given the price action seen in oil prices, and the increased realised volatility, Saudi Arabia’s proposal has largely been priced. Subsequently, this could hint at a sell the rumour, buy the fact type price action. However, a decision closer to Russia’s proposal i.e. >1mln bpd, will likely see oil prices come under renewed pressure.

Oil Prices to Leak Lower as OPEC Look to Switch On Supply Taps

Trade Wars Denting Oil Prices

Aside from the OPEC meeting, another cause of concern for commodity markets have been the escalation in trade wars. President Trump approved $50bln worth of import tariffs on China. However, a retaliation from China will likely dent investors’ appetite for risk, consequently weighing on oil prices.

BRENT CRUDEPRICE CHART: DAILY TIMEFRAME (October 2017-June 2018)

Oil Prices to Leak Lower as OPEC Look to Switch On Supply Taps

Chart by IG

On the downside, $73 holds for now, a close below $73.30 could see downward pressure continue with 100DMA seen as the next support zone at $71.74. Strong support stemming from the rising trendline from June 2017, which sits at $71. On the upside, resistance lies at $73.90-$74. A break through, could see a retest for $75.

OIL TRADING RESOURCES:

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES