Tue, Sep 27, 2022 @ 04:06 GMT
HomeContributorsFundamental AnalysisCrude Oil Soars After Saudi Arabia Concession On Supply Cuts

Crude Oil Soars After Saudi Arabia Concession On Supply Cuts

The price of crude oil soared after the OPEC+ members concluded their meeting. Brent, the global benchmark, rose to $54 while the West Texas Intermediate (WTI) rose to above $50 for the first time since March last year. This price action was mostly due to a concession by Saudi Arabia, which agreed to sharply reduce supply in a bid to boost prices. Other members will leave their output unchanged at the current level instead of gradually boosting production.

The US dollar was relatively unchanged overnight as the results of the Georgia runoff election started to stream-in. At the time of this writing, the race is relatively tight, with the two Republicans having a slight lead. However, things could change as the state releases its mail votes. If the two Republicans win, it will give Senator Mitch McConnell another term as the leader, giving him the power to reject most of Biden’s policies.

The Australian dollar eased slightly in early trading after Markit released the December services PMI data. In Australia, the services PMI remained unchanged at 57.0 in August while in China, it dropped from 57.8 in November to 56.3 in December. These numbers showed that the services sector was starting to pick-up in the two countries. Later today, Markit will publish the latest services PMI data from other countries. Other notable data scheduled for today is the ADP private employment numbers and the EIA inventory data.

XBR/USD

The XBR/USD soared to 54, after the concession by Saudi Arabia. That was the highest it has been since March last year before the WHO declared coronavirus a global pandemic. On the four-hour chart, this price is above the 14-day and 28-day moving averages. It is also on the upper side of the Bollinger Bands. The RSI has also continued to rise which is a sign that bulls are in control. Therefore, the pair may continue rising as bulls aim for the next resistance at 55.

EUR/USD

The EUR/USD pair was little changed overnight as the Georgia results continue. It is trading at 1.2293, which is slightly below yesterday’s high of 1.2323. On the hourly chart, the price is on the same level as the 14-day and 28-day moving average. It is also slightly above the ascending trendline that is shown in red. The Average Directional Index (ADX) is moving sideways. Therefore, the pair will likely have a significant breakout as the Georgia results come in.

AUD/NZD

The AUD/NZD pair is little changed after the Australia and China services PMI numbers. It is trading at 1.0695, which is slightly below this week’s high of 1.0723. On the four-hour chart, the price is slightly below the 61.8% Fibonacci retracement level. It is also slightly higher than the moving averages and the dots of the Parabolic SAR. Therefore, the pair could remain at the current level today. The key support and resistance to watch will be 1.0760 and 1.0723, respectively.

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