Crude Oil Price Analysis: Oil Prices Soar on OPEC Signal
Crude Oil Analysis & News
- Saudi Arabia Looking for Deeper Oil Cuts
- IG Retail Sentiment Shows Traders are Net Short
Saudi Arabia Looking for Deeper Oil Cuts
Throughout the week, oil markets will remain focused on the OPEC meeting, which is scheduled for Thursday, while non-OPEC ministers (Russia) will meet on Friday. As it stands, the consensus is for OPEC to stick with its current production quotas of 1.2mbpd. However, recent source reports have hinted that Saudi Arabia are looking to deepen oil cuts by another 400kbpd and to last until at least June 2020, given that OPEC’s analysis expect a significant oil and inventory build in the first half of 2020. Consequently, in reaction to the source reports, oil prices are notably firmer, gaining over 2% with Brent looking to test $62/bbl on the upside.
Crude Oil Price Chart: Daily Time Frame (Jul 2019 – Dec 2019)
Support: $61.00 (Rising Trendline), $59.60 (23.6% Fib of 7103-5608 drop)
Resistance: $61.79 (38.2% Fib of 7103-5608 drop), $63.60 (November peak)
Brent Crude Correlation with FX
*3-month correlation with Brent crude oil
IG Retail Positioning
US Crude: Retail trader data shows 43.34% of traders are net-long with the ratio of traders short to long at 1.31 to 1. The number of traders net-long is 4.75% lower than yesterday and 2.82% lower from last week, while the number of traders net-short is 6.88% lower than yesterday and 9.27% lower from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Oil - US Crude prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current Oil - US Crude price trend may soon reverse lower despite the fact traders remain net-short.
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.firstname.lastname@example.org
Follow Justin on Twitter @JMcQueenFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.