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
EUR/USD
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
Oil - US Crude
Mixed
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
Wall Street
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
Gold
Mixed
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
GBP/USD
Bullish
USD/JPY
Mixed
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
  • $USD hegemony is at risk thanks to changes in the global economy and the long-term consequences of the US-China trade war. Get your market update from @CVecchioFX here:https://t.co/5GO9UrvO4y https://t.co/OTTEmg76W8
  • The immediate focus is on a break of this multi-week consolidation formation in the Australian Dollar with the broader rally vulnerable while below 7042. Get your AUD technical analysis here: https://t.co/iEYos1ioBc https://t.co/kuzB3Eqps0
  • #Gold prices have rallied to nine-year highs with the breakout testing multi-year uptrend resistance into the open of Q3. Can the rally be sustained? Download our latest Gold trading guide!: https://t.co/3KO2QWOnOt https://t.co/YIIGZdeIAJ
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here:https://t.co/Fkzk88Y5gm https://t.co/zerRXZC1Tq
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/DmhBkd4B0k https://t.co/uj93z2SHpH
  • The Australian Dollar’s surge from the March lows may be coming to an end as bearish patterns begin to line up on multiple time-frames. Check out our #AUD trading guide to learn more here: https://t.co/pjfm07tqFd https://t.co/VypHLra1ER
  • The Evening Star candlestick is a three-candle pattern that signals a reversal in the market and is commonly used to trade forex. Learn more about the evening star candlestick pattern here: https://t.co/8OTE7m01IG https://t.co/Vumcng7UB3
  • After a miraculous recovery in Q2, equity markets will be left juggling the Fed’s policy and the threat of a second covid wave, all in an election year. Evidently, traders will have their hands full in Q3. Read our equity forecast here: https://t.co/JARqbOKIeM https://t.co/Ms6zEucjqg
  • Hey traders! I'm sure you've all heard about trend trading. Sharpen your knowledge here: https://t.co/jkliL5sxj7 https://t.co/uvlv1MCAHI
  • $GBPUSD posts impressive Q2 recovery, however, what upside challenges lie ahead in Q3? Download our #GBP trading guide to find out: https://t.co/ZE0yjc6wdQ https://t.co/bFa90VJYor
Oil Price Recovery to Linger as US Crude Output Continues to Contract

Oil Price Recovery to Linger as US Crude Output Continues to Contract

2020-06-12 23:30:00
David Song, Strategist
Share:
Crude Oil price chart

Source: IG Charts

Oil Talking Points

The price of oil pulls back from the monthly high ($40.44) even though the Organization of the Petroleum Exporting Countries (OPEC) agree to extend the production cuts unveiled at the April meeting, but the ongoing contraction in US production may keep crude prices afloat as output narrows for ten consecutive weeks.

Fundamental Forecast for Oil: Neutral

The price of oil gives back the advance from the start of June as the Organization for Economic Co-operation and Development (OECD) warns that “all countries are projected to experience a deep recession in 2020 followed by a slow and gradual recovery in 2021, and the economic shock from COVID-19 may continue to present headwinds for crude as US inventories unexpectedly increase 5720K in the week ending June 5 after contracting 2077K the week prior.

The threat of a protracted recovery may put pressure on OPEC and its allies to cap production throughout 2020, and the group may take further steps to rebalance the energy market as the most recent Monthly Oil Market Report (MOMR) warns that “in 2020, world oil demand growth isadjusted lower by 2.23 mb/d and is now forecast to drop by 9.07 mb/d.

It remains to be seen if anything new will be announced at the next Joint Ministerial Monitoring Committee (JMMC) meeting on June 18 as the production cuts announced at the April meeting are set to expire at the end of July, and signs of growing stockpiles may undermine the recent recovery in the price of oil as OPEC continues to highlight the “surge in tanker demand, driven by low crude prices and a need to push out excess supplies amid concerns about the availability of onshore storage capacity.”

Weekly us field production of crude oil

Nevertheless, the update from the US Energy Information Administration (EIA) showed field production of crude narrowing to 11,100K from 11,200K in the week ending May 29, and the response by oil producers may continue to stabilize the energy market as US output falls to its lowest level since October 2018.

With that said, the ongoing slowdown in global production may keep the price of oil afloat in June, but the gradual process of reopening the advanced economies may drag on crude prices amid the threat of a protracted recovery.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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

DISCLOSURES

News & Analysis at your fingertips.