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.

Free Trading Guides
Oil - US Crude
More View more

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.87%, while traders in France 40 are at opposite extremes with 81.79%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/oMqXKRmxpn
  • $EURUSD Daily Pivot Points: S3: 1.0847 S2: 1.0936 S1: 1.0969 R1: 1.1058 R2: 1.1115 R3: 1.1204 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • US Equities Update (Tuesday Close): $DJI +0.11% $SPX +0.25% $NDX +0.46% $RTY -0.38% $VIX -1.70%
  • #Brent: A break above $69.34 could push the price for a test of yesterday’s High at $71.03. Get your technical analysis from @malkudsi here: https://t.co/QE5zVInhPb #OOTT https://t.co/xQhpDP0UdB
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.08% France 40: 0.03% US 500: 0.01% Wall Street: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/Q0YYr8lAED
  • There is a significant disparity in US equity performance ($DJIA, green) and 'rest of world' ($VEU, blue). The global measure ($ACWI, candle) though presents the most impressive technical picture https://t.co/yCsUxO1xnK
  • Heads Up:🇺🇸 USD Net Long-term TIC Flows (JUL) due at 20:00 GMT (15min), Actual: N/A Expected: N/A Previous: $99.1b https://www.dailyfx.com/economic-calendar#2019-09-17
  • The US Citi Economic Surprise Index rises to 26.1 after Industrial and Manufacturing production beat estimates $DXY https://t.co/lMQTVylxUh
  • RT @Amena__Bakr: Prince Abdelaziz is urging countries to “help themselves” by aiding aramco fight threats #OOTT
  • US Treasury Yields Update: 2-Year: 1.733% 3-Year: 1.680% 5-Year: 1.659% 7-Year: 1.744% 10-Year: 1.803% 30-Year: 2.269% $TNX
Crude Oil Prices Swamped by OPEC Cuts, Global Growth Fears, Fed

Crude Oil Prices Swamped by OPEC Cuts, Global Growth Fears, Fed

2018-12-15 10:00:00
Daniel Dubrovsky, Analyst

Crude Oil Prices Swamped by OPEC Cuts, Global Growth Fears, Fed

Oil Fundamental Forecast: Neutral

  • Crude Oil prices head into last weeks of 2018 looking vulnerable, dominant downtrend holds
  • Supply disruption from Venezuela and OPEC output cuts may support prices in the near-term
  • Risks to prices including slowing global growth, more hawkish Fed and weaknesses in stocks

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

Crude oil prices head into the remaining weeks of 2018 looking vulnerable. Since bottoming in late November, hopes of OPEC production cuts and Russia unexpectedly playing along have failed to reverse the dominant downtrend from October. The sentiment-linked commodity remains undermined by fears of slowing global growth and we still have the Fed rate decision left.

This past week offered oil one of its best days since the beginning of this month amidst supply disruption concerns stemming from Venezuela. Simultaneously, Saudi Arabia announced a curb to petroleum exports to the US. Speaking of, the world’s largest economy has at this point pumped record amounts of output and overtaken Russian production.

The rise in crude oil slowed as risk appetite took a turn for the worse following a very cautious ECB monetary policy announcement. The central bank offered gloomy economic forecasts for the year ahead, then key Chinese industrial statistics slowed to their weakest pace since 2016. As the world’s second largest economy slows, OPEC cuts may be undermined given that China is a key consumer of the commodity.

Still, a report from the International Energy Agency last week offered potential prospects for higher prices down the road. According to the IEA, supply losses from Iran and Venezuela could underpin pledges from OPEC to reduce output. But, it is difficult to pick a fundamental bias until the Fed monetary policy announcement crosses the wires. It may offer something similar to what the ECB did.

Given that crude oil is largely priced in US Dollars, the tone for crude oil could be set by how the central bank impacts the greenback and broad sentiment. At this point, fears of US yield curve inversion and trade tensions between the world’s largest economies have sent 2019 rate hike bets dwindling. Looking at Fed funds futures, the chances of a subsequent hike after December are only at 27.7% in March.

Keep in mind, the central bank’s own projections call for at least three hikes next year. A Fed that revives hawkish expectations for next year is likely to boost the US Dollar and send stocks lower, hurting crude oil prices. Meanwhile, a more cautious tone that emphasizes on the outcome of data with lowered economic projections might do the opposite. Given these uncertainties, the crude oil fundamental outlook will have to be neutral.

For more immediate updates on crude oil prices, breaking news and technical analysis, you may follow me on Twitter @ddubrovskyFX for real time coverage.

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

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

Other Weekly Fundamental Forecasts:

Japanese Yen Forecast – USD/JPY Rate Fails to Test Monthly-High Ahead of Fed Rate Decision

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


News & Analysis at your fingertips.