Crude Oil Prices Relatively Stable Despite Concerns Over Global Economy
Crude oil price, news and analysis:
- Crude oil prices are shrugging off signs of a global economic slowdown led by China and the “flash crash” that has dented interest in riskier assets like stocks while strengthening safe havens like the Japanese Yen and gold.
- The commodity is benefiting from a report that OPEC output fell last month in its sharpest drop since January 2017.
Crude oil prices hold their ground
As riskier assets like stocks suffer and demand for safe-havens like gold increases on fears that an economic slowdown in China will dent global growth, crude oil prices are providing an ocean of stability in otherwise turbulent market waters.
US Crude Oil Price Chart, Five-Minute Timeframe (January 2-3, 2019)
Chart by IG (You can click on it for a larger image)
According to a survey by the Bloomberg news agency, published Wednesday, production in Saudi Arabia fell by 420,000 barrels in December in its steepest fall for almost two years. As a result, output from the members of the Organization of the Petroleum Exporting Countries (OPEC) suffered its sharpest pullback since 2017 – boosting oil prices despite continuing concerns about a supply glut and weakening global demand.
Since then, prices have eased back from the highs reached after the survey was published but are still benefiting from it – in contrast to the contradictory falls suffered when OPEC+, which comprises both members of the group and other exporters including Russia, agreed on December 7 to reduce output during the first six months of 2019.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.