Oil weaker on unclear signals

Posted 05 December, 2018

After a healthy start of the week oil prices failed to maintain recovery on Tuesday. The market is strongly affected by growing uncertainties on the upcoming meeting of the OPEC members along with generally unstable financial markets in the world. As a result, Brent prices hit $63.55/bbl, but then collapsed. As of Wednesday, the bearish trend persists and the 61 handle seems to be the target during the morning trading.

The market is full of unclear and controversial signals coming from OPEC members. Specifically, some of them believe that the market requires balancing now, whereas other producers uphold the view that it is too soon to bet on oil production cutbacks. Moreover, the players fail to agree on the size of the potential restrictions.

Additional pressure is also coming from the USA. According to the API data, crude oil reserves in the USA hiked by almost 5.5 million bbl despite the expectations. Notably, the increase was recorded in oil product reserves as well. Thus, the quotes can face more pressure if the US Energy Department confirms that the fact of higher reserves. For reference, the consensus forecast supposed a decline in oil reserves. However, the downward risks dominate the market, with the 60 handle being an important line of support.

Previous forecast

05 December, 2018 14:01

← New US threats against China despite agreed break in conflict

US President, Donald Trump is said to threaten Beijing with new import restrictions. The White House backs to its normal political messages, and this even since before the 90-day break period for intensive US-China talks achieved during the G20 summit failed to begin. For reference, it was agreed that the parties take a pause in an interchange of import duties beginning from January 1 2019. Specifically, as the US leader stated in the social network, there will be a real deal or nothing.

New US threats against China despite agreed break in conflict

Next forecast

04 December, 2018 13:55

Sterling shows solid upturn →

The sterling is on the rise on Tuesday. The bulk of the support is definitely coming from weaker US dollar encouraging sterling to hit new highs. As for the greenback, the American currency is depressed now by lower state-bond yield, which can be a sign of upcoming recession in the USA. Today, the sterling-to-US dollar exchange rate soared above the 1.28 handle for the first time since late November. Additional upturn driver was the message of the advocate general of the European court saying that London can refuse from Brexit on a unilateral basis until the court makes a final determination. However, this scenario is unlikely to happen, but this move bolstered the sterling.

Sterling shows solid upturn
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