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
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
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/Zl7sfu0OT2
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/QqlZ2dQgVv
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/lvIUu5FHoq
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/bpKdIqGxsn
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/jmcAIW4w5k
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/M9isuvnzqF
  • The British Pound is giving back some of its multi-month gains with some pairs testing notable support despite a positive fundamental backdrop. Get your market update from @nickcawley1 here: https://t.co/6Ct5R0H41F https://t.co/c4rXmMjMrv
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/4dhCP5pnxM
  • Gold is facing the neckline of a Double Bottom Pattern after bouncing off a confirmed longer-term trendline. Is a bullish reversal in order? Get your market update from @FxWestwater here: https://t.co/kLXZewWBMd https://t.co/w1Nu0z569m
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/8G8mUX4so6 https://t.co/Gn41XsGktg
Oil Q2 2021 Fundamental Forecast

Oil Q2 2021 Fundamental Forecast

Rich Dvorak, Analyst

Crude Oil Fundamental Forecast: Supply & Demand Dynamics to Bolster WTI Prices

Crude oil price action staged a remarkable rally during 1Q-2021. In fact, the commodity surged as much as 40% at its year-to-date high around $68.00 a barrel in early March. The strong bid beneath crude oil broadly tracked market optimism surrounding covid vaccine developments, massive fiscal stimulus packages, and improved outlook for global GDP growth. That said, during the second half of March, virus fears resurfaced and seemed to be pressuring the commodity. Is this stretch of short-term weakness set to continue into 2Q-2021 or will crude oil resume its ascent?

Oil Forecast
Oil Forecast
Recommended by Rich Dvorak
Download the full Oil 2Q Forecast!
Get My Guide

Global Covid Vaccination Efforts to Accelerate & Prop Up Crude Oil

Demand for crude oil hinges largely on the ebb and flow of economic activity, which is predominantly being driven by the course of the pandemic. Reopening efforts and the reflation trade are faltering as another wave of covid cases ravages key global economies and consumers of oil – such as in Europe. This weighed negatively on the crude oil outlook and fueled a notable correction in oil prices from early March highs to quarter’s end. Looking ahead to 2Q-2021, however, there is potential for the commodity to find some support and rebound higher.

Global COVID-19 Cases and Vaccinations (March 2020 – March 2021)

Oil Q2 2021 Fundamental Forecast

Source: Bloomberg

While the Eurozone and UK may be struggling with covid vaccine rollouts, this speedbump will likely be smoothed out. Moreover, the United States is administering over 2.5-million covid vaccines per day and is on pace to vaccinate 75% of its population within the next five months. This positive trend in vaccinations, coupled with businesses learning to operate better amid the pandemic and lockdown restrictions, stands to keep the reflation trade alive and crude oil prices afloat.

Crude Oil Price Action Might Resume its Climb with Help from OPEC+ Supply Cut Rollover

Shifting focus to the supply side, OPEC+ output stands out as another primary fundamental catalyst for the price outlook. The cartel of oil producers are set on rolling over existing production cuts through April led by a 1-million barrel per day reduction in output from Saudi Arabia. This recent development caught markets by surprise, since an increase in output was expected, and sent crude oil prices catapulting.

How to Trade Oil
How to Trade Oil
Recommended by Rich Dvorak
How to Trade Oil
Get My Guide

OPEC Crude Oil Production Based on Secondary Sources

Oil Q2 2021 Fundamental Forecast

Source: OPEC

The unexpected decision also sent a message that OPEC and its allies look to keep the oil market well supported. This brings OPEC+ meetings onto the radar with the next event scheduled for 01 April 2021. What’s more, monthly oil market reports released by OPEC or IEA could be of further interest to help traders gauge relative shifts in short-term supply and demand dynamics. Meanwhile, potential tension and conflict in the Middle East may create additional tailwinds for oil prices as this could materially impact output.

Market Volatility, Risk Appetite to Weigh on the Direction of Crude Oil

The price of crude oil generally maintains a strong inverse relationship with the S&P 500-derived VIX Index, or ‘fear-gauge,’ as illustrated on the chart below. This typically negative correlation between oil prices and the VIX is linked by their connection to investor demand for risky assets.

Light Crude Oil Futures & VIX Index (July 2018 – March 2021)

Oil Q2 2021 Fundamental Forecast

Source: TradingView, Chart by @RichDvorakFX

As investors seek to hedge exposure to stocks and increase downside protection during periods of heightened uncertainty, the VIX Index tends to rise with risk aversion. At the same time, crude oil prices typically turn lower when market sentiment deteriorates and prospects for global GDP growth erode. Consequently, commodity traders might want to keep tabs on the VIX to help gauge underlying risk trends and the broader direction of crude oil price action.

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

DISCLOSURES