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.

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
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Notice

BoE Chief Econimist (Hawk) is to Step Down From BoE After June Meeting

Real Time News
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 2.19% Gold: 0.74% Oil - US Crude: 0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/QNPEEysdEK
  • The Dow Jones, Nasdaq 100 and S&P 500 will look to the arrival of earnings season for influence. Get your #equities market update from @PeterHanksFX here:https://t.co/96vOGDYq2K https://t.co/xUE3PxGz9B
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.41%, while traders in France 40 are at opposite extremes with 75.87%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/akuL5mmcvW
  • Pfizer states it can deliver 10% more vaccine doses to the US by the end of May $PFE $SPX $NDX $RUT
  • Had the pleasure of sitting down with @GuyAdami and @RiskReversal for another episode of The Macro Setup to discuss $GLD $BTC and $SPX ahead of earnings season and the Coinbase IPO Watch here - https://t.co/6usEdkA5om
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: France 40: 0.41% Germany 30: 0.06% Wall Street: 0.00% FTSE 100: 0.00% US 500: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/0qT3sH7l3i
  • #Bitcoin breaks out to fresh all-time highs as investors cast an eye to the long awaited Coinbase IPO #BTC $BTCUSD https://t.co/qwxlzkGa9C
  • NY Fed Treasury purchase schedule remains unchanged - BBG
  • Silver posting a strong session, now up 2.3% on the day. In recent trade, silver has struggled to break above the 50-day EMA $XAG $USD https://t.co/BetnXeKLj3
  • Bitcoin sets another record high. BTC/USD gains traction in anticipation of Coinbase IPO. Get your $btc market update from @Tams707 here:https://t.co/twYdOVA0hW https://t.co/EXlj1yWjyL
Crude Oil Analysis: Oil Prices Most Overbought Since Q4 Crash

Crude Oil Analysis: Oil Prices Most Overbought Since Q4 Crash

Justin McQueen, Analyst

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