News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

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
Subscribe
Please try again
More View more
Real Time News
  • Believe it or not, some stocks may actually be more attractive in a bear market. Learn more about Defensive stocks here:https://t.co/TMcbMALtbw https://t.co/FQFnd3SIkG
  • Further your forex knowledge and gain insights from our expert analysts @JohnKicklighter and @JStanleyFX on $USD with our free Q4 market analysis guide, available for free today. https://t.co/7G7pWntiyY #DailyFXGuides https://t.co/k803MjNfTC
  • Stocks looked poised to rally with risk sentiment generally strong and technical signposts supportive of higher levels. Get your weekly equities forecast from @PaulRobinsonFX here: https://t.co/j0iidIkrfR https://t.co/Jki7lJcs0B
  • Volatility, volatility, volatility. It's talked about so often but how can a trader really incorporate this into their approach? Find out here: https://t.co/SVmeGHIP2P https://t.co/rRe35rW8Mh
  • Markets move in cycles, and stocks do too, with certain sectors carrying more attraction in various backdrops. Learn more here:https://t.co/HMyeIy09Wm https://t.co/K16BSqaRxw
  • Bitcoin broke above $60k earlier in the session to a fresh multi-month high on the renewed expectation that the SEC will approve a futures-based Bitcoin ETF very soon. Get your weekly #Bitcoin forecast from @nickcawley1 here: https://t.co/cq9KH6fdQB https://t.co/isXVY87GZq
  • Further your stock trading knowledge and gain informed market analyses from our expert analysts @HathornSabin and @JMcQueenFX on Indexes with our free Q4 guide, available today.https://t.co/YQG1aaIT8C #Dailyfxguides https://t.co/aJViAT9lw8
  • Get your basics right. Find out what is stock market volatility and how you can trade It here:https://t.co/pK95WaqA3j https://t.co/sLMza2wKYd
  • The Japanese Yen continues to be pummeled against most major currencies. Get your weekly Japanese Yen forecast from @HathornSabin here: https://t.co/WY5rcoqNP2 https://t.co/JT8yOUgceA
  • The US Dollar paused its advance against ASEAN currencies. USD/SGD eyes a key trendline, USD/THB risks stalling, USD/PHP enters consolidation as USD/IDR continues ranging. Get your market update from @ddubrovskyFX here:https://t.co/Hd4mu0MKkp https://t.co/1kOgueJOXz
Crude Oil Analysis: Oil Prices Most Overbought Since Q4 Crash

Crude Oil Analysis: Oil Prices Most Overbought Since Q4 Crash

Justin McQueen, Strategist

Oil Price Analysis and News

  • Oil Prices Gain Amid Rising Geopolitical Premium
  • WTI Crude Outperformance Over Brent Crude
  • Oil Waiver Extension Raises Prospect of Pullback

Oil Prices Gain Amid Rising Geopolitical Premium

In recent sessions crude oil prices have been edging higher with Brent crude futures most recently hitting a 5-month high having topped $71/bbl. This is largely unsurprising given that bullish catalysts continue to remain intact for oil prices despite the fears that global growth is slowing with the IMF yesterday cutting their forecast to the lowest since the financial crisis.

Oil sanctions on Iran and Venezuela continue to cripple oil supply in both nations with the latter likely to see supply south of 1mbpd with no end in sight for supply disruptions. While for Iran, tensions stepped up yet again after the US designated Iran’s Revolutionary Guard as a foreign terrorist group. Elsewhere, the latest catalyst to propel oil prices higher had been due to the escalation of fighting in Libya. Although oil supply and exports have yet been impacted, it has been enough to take crude oil to 5-month highs. Alongside this, union strikes at Shell’s Pernis refinery (largest in Europe, with a capacity of 404kbpd) have also added to the bullish sentiment with Shell stating that 65% of output will be impacted.

WTI Crude Outperformance Over Brent Crude

However, what is perhaps more surprising is that much of the gains have been seen in WTI as opposed to Brent, which in turn has seen the WTI/Brent narrow to $6.60. Some reasons for this had been due to the most recent Genscape cushing figures reporting a sizeable drawdown, while the WTI curve had also moved into backwardation. Although, given yesterday’s larger than expected build in the API report (4.09mln vs. Exp. 2.3mln) eyes will turn towards today’s DoE crude inventory report.

Oil Waiver Extension Raises Prospect of Pullback

As it stands, oil prices are now the most overbought (on RSI) since the Q4 crash which may signal that upside may be somewhat stretched, particularly as oil continues to move into President Trump’s tweeting zone, while the expiration of the current oil waivers draws closer (expiration early May). Currently, Japan and India have reported that they have halted their purchases of Iranian crude for May as they await further clarity on Iran oil waivers. If indeed the Trump administration allow for an extension, this could moderate the upside seen in oil. However, with Trump’s determination to bring Iranian exports to zero, a decision to not offer an extension could see the next wave of buying in in crude with a move towards $75 on the cards, provided Brent breaks above resistance at $72.50.

BRENT CRUDE OIL DAILY TIME FRAME (AUG 2018 – APR 2019)

Please add a description for the image.

Oil Impact on FX

Net Oil Importers: These countries tend to be worse off when the price of oil rises. This includes, KRW, ZAR, INR, TRY, EUR, CNY, IDR, JPY

Net Oil Exporters: These counties tend to benefit when the price of oil rises. This includes RUB, CAD, MXN, NOK.

More Reading

What Traders Need to Know When Trading the Oil Market

Important Difference Between WTI and Brent

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

DISCLOSURES