Crude Oil Rallies on Saudi Arabia $80 talk - US Market Open
MARKET DEVELOPMENT – SAUDI TALK BOOSTS CRUDE OIL PRICES
Crude Oil: Brent and WTI crude futures surged after reports that Saudi Arabia is said to be comfortable with Brent crude above $80/barrel. Brent now trading higher by 1.4%, having pushed above $79. Alongside this, the latest Saudi Arabian production figures from JODI showed a drop in Saudi output, consequently providing another lift to oil prices.
CAD: The Loonie finding a bid this morning amid the slip in the Dollar index, while firmer oil prices have also added to the gains. USDCAD briefly slipping below 1.30 for now, however, the focus for the pair is NAFTA developments. Freeland and Lighthizer are scheduled to meet on NAFTA tomorrow.
EUR: The Euro back above the 1.17 handle with the currency continuing to find support from the USD selling theme. 1.1720 remains the stumbling block for further upside, which has held firm on numerous occasions. A firm break would need needed to open up the doors for a test of the June high at 1.1850.
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IG Client Sentiment Index: US Crude Oil Chart of the Day
Oil - US Crude: Data shows 63.8% of traders are net-long with the ratio of traders long to short at 1.76 to 1. In fact, traders have remained net-long since Sep 05 when Oil - US Crude traded near 6924.2; price has moved 1.2% lower since then. The number of traders net-long is 20.7% lower than yesterday and 30.4% lower from last week, while the number of traders net-short is 36.6% lower than yesterday and 24.6% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil - US Crude prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Oil - US Crude trading bias.
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--- Written by Justin McQueen, Market Analyst
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