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
Mixed
GBP/USD
Bullish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • Palladium Vastly Outperformed Gold Prices in 2019. Is it Topping? - https://www.dailyfx.com/forex/fundamental/article/special_report/2019/10/24/Palladium-Vastly-Outperformed-Gold-Prices-in-2019.-Is-it-Topping.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #xpdusd #PALLADIUM
  • My trading video for today: 'Dow Winds Up Despite #Earnings Run, Watch $EURUSD with #ECB, Brexit Anticipation' https://www.dailyfx.com/forex/video/daily_news_report/2019/10/24/Dow-Winds-Up-Despite-Earnings-Run-Watch-EURUSD-with-ECB-Brexit-Anticipation.html?utm_source=Twitter&utm_medium=Kicklighter&utm_campaign=twr
  • The #Euro has mounted an impressive rally against the US Dollar, moving to challenge the bounds of the trend leading it lower since mid-2018. Get your $EURUSD market update from @IlyaSpivak here: https://t.co/fIkLmThWMK https://t.co/W7QwuWhrTg
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.95%, while traders in US 500 are at opposite extremes with 78.66%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/2j4Lx7rVLT
  • #BRL, #ZAR and #GBP are expected to be the most-active majors versus #USD with one-week implied volatility at 13.55, 13.13 and 11.17 respectively
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.08% 🇪🇺EUR: 0.05% 🇨🇭CHF: 0.03% 🇨🇦CAD: -0.05% 🇦🇺AUD: -0.10% 🇳🇿NZD: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Fy3dfUZ2kK
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: France 40: 0.14% US 500: 0.08% Wall Street: 0.06% Germany 30: 0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/J8oNDusqYy
  • #DAX: Currently the market is trying to push beyond the reversal-day high, but if it does the December t-line and a minor swing-high from July 2018 stand in a way of a further advance. Get your DAX technical analysis from @PaulRobinsonFX here: https://t.co/1Yus7TddGo https://t.co/jiwN6z3TFB
  • #AUD and #NZD are modestly lower while #CHF and #JPY are modestly higher, suggesting market sentiment is favoring a risk-off tilt
  • The British Pound may be at risk of losing upside momentum against the US Dollar and Japanese Yen as #Brexit limbo fuels a shift in $GBPUSD and $GBPJPY contrarian trading outlooks. Get your market update from @ddubrovskyFX here: https://t.co/hHcAFEzO3X https://t.co/24vKxDohDI
Oil Prices Face Renewed Risk of Bear Market as OPEC Sees Waning Demand

Oil Prices Face Renewed Risk of Bear Market as OPEC Sees Waning Demand

2019-10-01 00:30:00
David Song, Currency Strategist
Share:

Oil Price Talking Points

The price of oil extends the decline from the September-high ($63.38) as crude production in Saudi Arabia gets restored, with energy price facing a renewed risk of a bear market amid the weakening outlook for consumption.

Oil Prices Face Renewed Risk of Bear Market as OPEC Sees Waning Demand

Oil gives back the advance following the supply-side shock as Aramco Trading CEO Ibrahim Al-Buainain states the region reached its “target of production” on September 25, but the Organization of the Petroleum Exporting Countries (OPEC) may continue to regulate the energy market as the group cuts its demand forecast for 2019.

Image of OPEC oil demand forecast

OPEC’s Monthly Oil Market Report (MOMR) continues to warn of lower consumption, with the most recent report highlighting that “world oil demand in 2019 is expected to grow by 1.02 mb/d, which is 0.08 mb/d lower than last month’s projection.”

The weakening outlook for global growth may push OPEC and its allies to cap production beyond 2019 as Secretary General Mohammad Sanusi Barkindo pledges to “further build on this cooperation through the ‘Charter of Cooperation, and the group may take additional steps to keep oil prices afloat as Mr. Barkindo insist that “further and more intensified cooperation is the best prescription to treat volatility.

Image of EIA US weekly field production of crude oil

OPEC and its allies may continue to respond the rise in US output as weekly field production climbs back to the record-high print of 12,500K in the week ending September 20, and it remains to be seen if the group will make a major announcement at the next meeting between December 5-6 amid the weakening outlook for consumption.

With that said, oil prices face a renewed risk of a bear market, with recent developments in the Relative Strength Index (RSI) bringing the downside targets on the radar as the oscillator snaps the bullish formation from earlier this year.

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 crude oil daily chart

Source: Trading View

  • The broader outlook for crude oil remains tilted to the downside as a ‘death-cross’ formation took shape in July, with recent developments in the Relative Strength Index (RSI) offering a bearish signal as the oscillator snaps the upward trend from June.
  • However, the flattening slopes in the 50-Day ($55.96) and 200-Day SMA ($56.53) warn of range-bound conditions as the moving averages converge with one another.
  • Keep in mind, the advance following the supply-side shock has failed to spur a test of the May-high ($63.96), with the break/close below the $54.90 (61.8% expansion) to $55.60 (61.8% retracement) area raising the risk for a move back towards the $51.40 (50% retracement) to $51.80 (50% expansion) region.
  • The 2019-low ($50.52) comes up next followed by the Fibonacci overlap around $48.80 (38.2% expansion) to $49.80 (78.6% retracement).

For more in-depth analysis, check out the 4Q 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.