Never miss a story from Daniel Dubrovsky

Subscribe to recieve updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Daniel Dubrovsky

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Oil

Oil Fundamental Forecast: Bearish

  • Crude oil prices clocked in the longest losing streak since 1984+ on fading OPEC oil demand
  • Saudi Arabia revived output production cuts as oil paused its descent, but those may be in vain
  • Russia doesn’t seem to be for cuts as US keeps pumping oil, perhaps undermining OPEC efforts

Trade all the major global economic data live and interactive at the DailyFX Webinars. We’d love to have you along.

Crude oil prices extended declines from last week as anticipated, clocking in a remarkable 12 days of consecutive losses. This was the longest consecutive sessions of losses since at least 1984. The backdrop for weakness in the commodity was as a result of warnings from OPEC that they see demand for their stockpiles easing.

As a result, speculation has been renewed that supply cuts from the petroleum-producing cartel could be on the table. Saudi Arabia proposed lowering output in excess of more than one million barrels per day. But cooperation within OPEC nations may not be easily achieved. Even if it is, the impact of production cuts could be limited.

This is because Russia, a key producer of oil, may not be on the same page with OPEC cuts like it was back in 2016. Russia’s President Vladimir Putin briefly met with US President Donald Trump last Sunday in Paris where they talked about oil. During their conversation, Putin said that he would not commit to cutting output.

Instead, he noted that he is happy with current prices and that they are in a “wait and see approach”. Vladimir Putin also wants to restore relations with the US which actually recently overtook Russia in terms of crude oil production. Meanwhile, Mr. Trump has at this point expressed numerous times that his preference is for lower prices.

Combining this potentially undermines efforts from OPEC to lift prices and attempts that crude oil makes to climb in the week ahead could be in vain down the road. In addition, the sentiment-linked commodity could have more room to fall should Brexit fears inspire risk-off trading dynamics. Finally, the US economic docket is notably lacking data given the Thanksgiving Holiday which also brings with it illiquidity. With that in mind, the crude oil fundamental outlook remains bearish.

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter