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
EUR/USD
Bullish
GBP/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
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
Gold
Bearish
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • The New York #forex session is one of the most liquid #forextrading sessions. Want to learn to trade in this session? Read up! https://t.co/qDNTKLVhFa https://t.co/tZetcS5Ev7
  • #DidYouKnow a #Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/c51s3IBcEu https://t.co/roWhofPtMb
  • $USD price action has edged roughly 1.5% lower since touching year-to-date highs earlier this month and the recent stretch of weakness jeopardizes the US Dollar’s bullish trend. https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/10/13/usd-price-us-dollar-technical-forecast-eurusd-gbpusd-audusd-usdcad.html
  • RT @C_Barraud: 🇮🇳 World Bank Says #India Faces Severe Slowdown, Cuts GDP Forecast - Bloomberg *India’s gross domestic product growth seen a…
  • Why are Bollinger Bands @bbands and #forex such a good combo? Because forex is a form of pairs trading, each transaction involving a long position in one currency and a short position in another. Find out how you can use it in your trading strategy here: https://t.co/ZuN2xl5GIw https://t.co/G0ByyTvBnT
  • Lessons from Bretton Woods are forgotten, the US-China #tradewar represents a true existential threat to the post-World War II international trade order, and in turn, the globalized economy that has grown out of the ashes of history. More from @CVecchioFX :https://t.co/paaBxX6Xt0 https://t.co/Bf4KXjRYzR
  • The inside bar pattern occurs regularly within the financial markets. Incorporating the inside bar strategy within a trading system can enhance a trader’s market analysis technique. Find out how you can use it from @WVenketas here: https://t.co/E3EWOYTYNw https://t.co/4mSc3NB4qM
  • Currency markets may be battered by breakneck volatility if a slowdown in global economic growth triggers a collapse in the fragile market for collateralized loan obligations (CLOs). Get your market update from @ZabelinDimitri here:https://t.co/KfjjtaXs7b https://t.co/FbNC12Nq6A
  • The $GBP will be in for a volatile week ahead of critical talks at the EU-UK summit as the October 31 deadline approaches. Will policymakers be able to avoid a no-deal #Brexit? Get your $GBPUSD market update from @ZabelinDimitri here: https://t.co/r7eAf885V6 https://t.co/sqqRqnrPYa
  • Philip Shaw, Chief Economist at @Investec walks us through his views on the continuing #Brexit saga. What are the latest implications on the $GBP and Euro? Find out on Global Markets Decoded #podcast here: https://t.co/x0JW5M7L8U https://t.co/D0LIwdXJ3x
Waning US Crude Inventories to Keep Oil Prices Afloat

Waning US Crude Inventories to Keep Oil Prices Afloat

2019-07-24 07:00:00
David Song, Currency Strategist
Share:

Oil Price Talking Points

The price of oil extends the advance from the July-low ($54.72) even though the International Monetary Fund (IMF) lowers its growth forecast for the world economy, and crude prices may continue to retrace the decline from earlier this month as US inventories are expected to contract for the sixth consecutive week.

Waning US Crude Inventories to Keep Crude Oil Prices Afloat

Oil prices may stage a larger rebound despite the turmoil surrounding the Strait of Hormuz, a key hub for crude shipments, should data prints coming out of the US economy indicate healthy demand.

Image of DailyFX economic calendar

Updates from the US Energy Information Administration (EIA) are anticipated to show crude inventories narrowing 4261K after contracting 3116K in the week ending July 12, and waning stockpiles may keep oil prices afloat as the Organization of the Petroleum Exporting Countries (OPEC) and its allies pledge to regulate the energy market throughout 2019.

However, another batch of mixed data prints may drag on crude prices as the US and China, the two largest consumers of oil, struggle to reach a trade agreement, and OPEC and its allies may take additional steps to balance the energy market as the shift in trade policy curbs the outlook for global growth.

It remains to be seen if OPEC and its allies will establish a lower rate of production as the most recent Monthly Oil Market Report (MOMR) states that “in 2019, the global oil demand growth forecast remains at 1.14 mb/d, with expectations for global oil demand to reach 99.87 mb/d.”

As a result, the group may stick to the sidelines ahead of the next meeting on December 5 as “in 2020, the initial forecast indicates growth of around 1.14 mb/d y-o-y, as global oil demand is anticipated to surpass the 100 mb/d threshold on an annual basis, to average 101.01 mb/d for the year.”

The projections suggest OPEC and its allies are in no rush to curb supply, and the weakening outlook for the world economy may keep oil prices under pressure amid little signed of an imminent US-China trade deal.

With that said, oil prices remain at risk of facing a bear market over the coming months especially as a ‘death-cross’ formation takes shape in July.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss key themes and potential trade setups.

Crude Oil Daily Chart

Image of oil daily chart

  • Keep in mind, the broader outlook for crude oil is no longer constructive as both price and the Relative Strength Index (RSI) snap the bullish trends from earlier this year.
  • At the same time, a ‘death cross’ formation has taken shape in July as the 50-Day SMA ($57.15) crosses below the 200-Day SMA ($57.65), with both moving averages tracking a negative slope.
  • Nevertheless, the decline from the monthly-high ($60.94) appears to have stalled ahead of the Fibonacci overlap around $54.40 (23.6% retracement) to $55.60 (61.8% retracement), with a move above the $56.70 (38.2% retracement) to $57.40 (61.8% retracement) region raising the risk for a move towards the $58.60 (50% retracement) to $59.70 (50% retracement) area.

For more in-depth analysis, check out the 3Q 2019 Forecast for Oil

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other markets the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- 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.