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
EUR/USD
Mixed
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here:https://t.co/sR7HqpK8BI https://t.co/Q6WGzHhudp
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/2MCG036HGH https://t.co/CbnRsuyRwi
  • #Gold saw its worst performance the past 5 days in 5 months as longer-dated government bond yields in developed countries rose Could this be the beginning of a turning point in #XAUUSD? https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/08/15/Gold-Price-Outlook-Will-XAUUSD-Brush-off-Worst-Week-in-5-Months.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/x2Indk3b7P
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/PT09ZsIOCa
  • The US #Dollar may rise, buoyed by haven demand as fiscal stimulus talks stagnate and swelling tensions between Washington and Beijing sink trade talks. Get your #currencies update from @DanielGMoss here: https://t.co/Wcw9PDUr67 https://t.co/gnYZYl6aLV
  • Upside in #CrudeOil struggling ahead of #OPEC meeting. Cartel likely to maintain wait and see approach. Get your #commodities update from @JMcQueenFX here: https://t.co/gNHHKoTUzm https://t.co/eF40DRIBJ5
  • #Gold had some big moves last week, and while vol is expected to die down a bit, it will be important to see if gold can hold its ground in the coming days/weeks. Get your #metals update from @PaulRobinsonFX here: https://t.co/N8a84hRnHN https://t.co/3fjodPHTDm
  • The S&P 500's refusal to hit a record and Dollar's anchor to range this past week is sign of summer liquidity conditions, but the quiet is not insurmountable. 'S&P 500 Record and Dollar Break Look to Stimulus and Trade to Override Seasonality' https://www.dailyfx.com/forex/video/daily_news_report/2020/08/15/SP-500-Record-and-Dollar-Break-Look-to-Stimulus-and-Trade-to-Override-Seasonality-.html https://t.co/mbvPkdQfYl
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/DmhBkcMZBK https://t.co/kFk6ccU3Sk
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/aXSB0bG3y0
Crude Oil Outlook: OPEC+ Curbs Supply Cut as GDP Growth Curtails

Crude Oil Outlook: OPEC+ Curbs Supply Cut as GDP Growth Curtails

2020-07-30 21:15:00
Rich Dvorak, Analyst
Share:

CRUDE OIL PRICE FORECAST: OPEC+ SUPPLY INCREASE ON TAP AS GLOBAL ECONOMIC ACTIVITY REBOUND SLOWS FROM Q2 GDP GROWTH IMPLOSION

  • Crude oil prices have climbed with risk assets as market sentiment and economic activity rebound from the coronavirus lockdown
  • Saudi Arabia and Russia solidified an agreement to begin unwinding historic OPEC+ supply cuts as world oil demand snaps back
  • 2Q-2020 GDP growth rates from advanced economies detailed record-setting downturns and Fed Chair Powell just hinted the recovery has stalled

Crude oil price action has staged a monumental recovery since the commodity traded in negative territory this past April. The rally in oil prices over recent weeks looks largely on the back of two bullish fundamental drivers: an OPEC+ deal to slash supply combined with a welcomed rebound in global energy consumption.

WTI CRUDE OIL FUTURES PRICE: DECEMBER 2019 – JULY 2020 (CHART 1)

Crude Oil Price Chart Outlook

Chart created by @RichDvorakFX with TradingView

WTI crude oil currently fluctuates around $40.00 per barrel measured by the front-month futures contract, but the advance has started to stall, and petroleum performance is still down about 34% since the start of January. Broadly speaking, lower crude oil prices stem from a whopping 9% plunge in world oil demand expected this year due to a screeching halt in economic activity amid the coronavirus lockdown.

Understanding the Core Fundamentals of Oil Trading
Understanding the Core Fundamentals of Oil Trading
Recommended by Rich Dvorak
Understanding the Core Fundamentals of Oil Trading
Get My Guide

This has primarily contributed to a supply-demand imbalance of 9.8-million barrels per day penciled in by OPEC for 2Q-2020. Looking forward, however, the cartel of major oil producers have optimistic projections for world oil demand to recover during the second half of 2020 and into 2021. Both the IEA and EIA anticipate global oil demand to increase in the months ahead as well according to their respective monthly oil reports.

OPEC & ALLIES SET TO CURTAIL PRODUCTION CUTS AMID EXPECTED DEMAND RECOVERY (CHART 2)

Crude Oil Price Chart OPEC Global Oil Demand Outlook

Chart Source: OPEC Monthly Oil Market Report

Rising demand for crude oil has correspondingly enticed OPEC and its allies to begin reversing production cuts announced earlier this year that were aimed at absorbing excess market supply. This was indicated by OPEC+ delegates who backed an agreement solidified by Saudi Arabia and Russia to increase the group’s crude oil output by 2-million barrels per day starting next month.

Learn More – Global Commodities: Worldwide Commodity Imports & Exports (Interactive Tool)

The move looks to ease OPEC+ production cuts from 9.7-million barrels per day to 7.7-million barrels per day on net. As such, a bearish risk facing crude oil price action emerges with OPEC+ set to unwind prior supply cuts and relax oversight of standing output quotas. Another notable headwind looming over the direction of crude oil includes potential for the v-shaped recovery in global GDP growth to abate as the ‘liquidity high’ from unprecedented monetary and fiscal stimulus measures wears off.

GLOBAL ECONOMIES REPORT STAGGERINGQ2 GDP GROWTH RATE DECLINES (CHART 3)

GDP Growth Rate United States Germany 2Q 2020

Chart Source: DailyFX Economic Calendar

To that end, GDP growth rates out of the United States and Eurozone, who are two of the world’s biggest economies and consumers of crude oil, are showing historic contractions for 2Q-2020. Economic activity has undoubtedly improved since the second quarter trough when the global economy was paralyzed during the coronavirus lockdown, but there is mounting evidence that pent-up demand has sputtered out, which leaves crude oil prices hanging in jeopardy.

Introduction to Forex News Trading
Introduction to Forex News Trading
Recommended by Rich Dvorak
Introduction to Forex News Trading
Get My Guide

Odds of this threat garnering further credence was just hinted at by Jerome Powell, Chair of the Federal Reserve, who stated during yesterday’s FOMC decision press conference how leading economic indicators and high-frequency data since June point to the recovery losing momentum. Two additional fundamental themes prudent traders may want to keep tabs on include rising jobless claims and escalating china tensions, which might steer crude oil prices lower if these bearish headwinds gain traction as well.

Learn More – How to Trade Oil: Crude Oil Trading Strategies & Tips

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES

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.