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CAD to Gain Further On Risk Appetite and Higher Crude Oil Price, Upside Limited by BOC Actions

Similar to Australian dollar, Canadian dollar this year should continue to benefit from broad-based USD weakness, global recovery, and rebound in commodity, in particular crude oil, prices. However, with the US as its largest trading partner, BOC should track the Fed’s monetary policy closely, and avoid excessive appreciation of...

Why Are Iron Ore Prices at 7 Year Highs?

Commodity markets have surged through the end of November and into December on optimism that the rollout of vaccines could see global activity return to more normal levels. And with record amounts of central bank liquidity, ongoing enormous fiscal support and hopes that we will see increased investment into...

OPEC+ to Raise Output from January 2021

OPEC+ finally reached an output cut deal, agreeing to increase production by +0.5M bpd from January 2021. The outcome was slightly surprising as the market had anticiapted an extension of output cut fro three months until March 2021. We believe the decision was a compromise among producers of conflicting...

Oil Steady ahead of OPEC Meeting

Traders take profit as OPEC+ meets to discuss 2021 production plans Pre-meeting talks between a select few key OPEC+ ministers failed to generate a consensus on production plans for next year. This includes plans for January, when cuts had planned to be reduced by two million barrels, to 5.7 million....

Week Ahead – Data Overload May Spoil Vaccine Euphoria; NFP to Lead the Pack

It’s NFP week and as investors battle the vaccine optimism against the short-term gloom, the latest jobs report from the United States may determine which way sentiment sways next. Canada will also publish jobs numbers along with its Q3 GDP print. The Reserve Bank of Australia, meanwhile, will kick...

Questionable OPEC Solidarity Casts Doubt on Output Cut Commitments

While vaccine news should be bullish for the oil market, the rally in crude oil price proves short lived. Ahead of next week’s meeting to decide extension of output cuts, a long-term OPEC member, the UAE, reportedly has shown discontent about the output cut deal. There are rumors that...

OPEC+ Compliance Remains a Lingering Concern over Crude’s Demand/Supply Balance

The near-term outlook on crude oil price has turned sour, as supply is projected to rise despite high uncertainty in the demand outlook. Both crude oil benchmarks fell more than -2%, as Norwegian output resumes after strike, Libya supply is set to increase further and US production facilities restart...

Crude Oil Prices Down in 3 out of 4 Weeks. Outlook Dependent on Pandemic, OPEC+ Compliance and Libya’s Output

Crude oil prices have declined for 3 out of the past 4 weeks. the most recent weakness has been driven by concerns over the demand outlook as a third wave of coronavirus outbreak has hit Europe. This is also a reason for the narrowing in WTI-Brent spread although the...

Crude’s Strength Might Pause as OPEC+ Output Set to Increase Further this Month

Crude oil prices remained firm, after the rally in July. The front-month WTI crude oil contract gained +2.36% in the first week of August, after gaining +2.55% in the month of July. The Brent contract rose +2.54%, following a +5.22% rally in July. Profit-taking might be seen in coming...

Oil Fixed Between $43-44

Early in August, Brent is slightly correcting downwards ad trading at $43.37. While the news flow is quite calm, investors continue monitoring supply and demand in the oil sector, and frankly, they don’t like what the see. A new stage of the OPEC+ agreement is coming into effect. Starting from...

Oil Bulls Are Very Hesitant

On Monday, July 13th, Brent is falling and trading at $42.93. Basically, if one remembers the oil price this spring, the current value is quite stable. However, market players can’t be sure in anything, neither the oil price surge amid the increasing demand, nor the lack of demand and,...

Upside in Crude Oil Prices Limited: OPEC+ Cut Prone to Ease Next Month while US Inventory Gained on Imports

The rise in oil prices paused while hovering at recent highs. While there are signs that OPEC+ has cut output more than promised, the increase in US inventory has again raised concerns about oversupply. S&P's survey suggests that OPEC-10 as a whole reduced output aggressively in June. The aggregate...

Brent Futures Pull Back from More than 3-Month Peak

Brent crude oil futures stretched their two-month rally to a more than three-month high of 44.00 last Tuesday before pulling slightly lower. The RSI seems to be gaining momentum above the 50 level, while the stochastic oscillator is ready to post a bullish crossover within its %K and %D...

Emerging from Lockdown: A V-Shaped Recovery or False Optimism?

Looking at how risk assets have been performing over the past three months, it’s hard to tell there’s a global pandemic going on. To put it into more context, if someone had been living on a desert island during this time, they would be forgiven for thinking that the...

Downside Risks of Crude OIl Price Rising Despite Recent Optimism

Crude oil prices have remained firm, supported by positive news from both OPEC+ and better demand/supply outlook. The latest monthly report by the International Energy Agency (IEA) has depicted a more optimistic outlook on the oil market. The agency raised its global oil demand forecast to 91.7M bpd for...

Sales in Oil Are Not Letting Up

At the start of another June week, Brent remains under bearish pressure. The asset is trading at 37.58 and has significant reasons for that. The key thing that triggered these sales in the instrument is investors’ concerns about the slow growth of the demand for commodities – not as active...

Oil Controlled by Good News

Early in the second week of June, Brent remains in the “black” and looks rather promising. Last weekend, investors got some good news and are now responding to it. During the OPEC+ meeting that took place on Saturday, the cartel’s ministers agreed to expand the low oil output period for...

What Is Driving Risk Assets Higher?

Equities are moving higher in early Asian trade after a robust performance from Wall Street on Wednesday. US equities not only ended the session higher, but the S&P 500 is making an attempt to break out of the consolidation zone it has been stuck in for more than five...

Crude Reality

Executive Summary Oil markets have come under extreme pressure this year amid the COVID-19 outbreak which has significantly reduced demand. In addition, the price war between Saudi Arabia and Russia earlier this year added to the supply glut. Although OPEC+ producers recently took action to cut production, the magnitude...

Oil Is Suffering from Market Risks Again

Oil is falling again. On Monday, April 27th, Brent is approaching $20.30 (-5.2%) amid investors’ concerns that global stocks may yet be overlooked. Global demand for oil remains weak and that’s quite normal. However, global supply isn’t going down and that’s a major risk. Last week, US Department of Energy...

Brent Futures Complete Double Bottom at 24.55; Surpass SMAs

Brent has gained some of its positive momentum after the creation of a double bottom pattern at 24.55 on March 18 and on April 1. In the short-term the market could retain range-bound trading as the RSI is moving sideways above the 50 level and the MACD remains near...

Oil Wars During a Pandemic: It Could Get Messy – Special Report

After the production alliance between Saudi Arabia and Russia fell apart, pushing oil prices dramatically lower on concerns of a supply war at a time when the virus outbreak depresses demand, everyone is wondering what’s the floor for crude. We seem to be headed for a period where markets...

Brent Futures Covers Gap Down; Still Bearish in Short Term

Brent futures sank towards a fresh low of 31.23 on Monday, creating a gap down, however, they covered some of the losses in the previous four-hour sessions. Looking at the technical indicators, the RSI turned lower but is still the near 50 level, while the stochastic oscillator is losing momentum after...

Oil: What Happens Next?

It has been a while since Saudi Arabia flexed its muscles to show exactly what it can do in the oil market but this weekend the gloves came off. Instead of playing nice as everybody expected it to after the failed OPEC+ discussions last week, and instead of cutting output...

Saudi’s Oil War to Lead to Oversupply in 2Q20, Driving Away High-Cost Producers

Oil market roiled by the surprising collapse of OPEC+ talk. For the time since late 2016, OPEC members and a number of non-OPEC oil producers failed to agree on a deal to limit output, as Russia refused to commit. In response, Saudi Arabia, the largest producer in OPEC and...

Flash Comment OPEC: Prospect Of An Oil Price War

After Friday's collapse in OPEC+ talks, the oil market could be facing a price war. Russia and Saudi Arabia have around 2-2.5mb/d in spare capacity they could use to drive down prices. The negative demand shock from COVID-19 and a possible positive supply shock could force Brent below...

Oil Market Week Ahead: Worse Before it Gets Better

The week ahead in Europe will get worse before it gets better, bringing a large level of uncertainty to the oil markets. The number of new coronavirus cases in Germany and France is gathering critical mass, big enough to start disrupting working life, close schools and bring businesses to a...

Crude Oil Back to Correction

On March 2nd, the first trading session of the spring, Brent is correcting upwards after plummeting the week before. On Monday morning, the instrument is trading at 51.25 USD with the last week’s lows being at 48.50 USD. Another thing that supports oil prices is Saudi Arabia’s intention to cut...

Coronavirus Goes Global, Brent Blasted By Bears

As my colleague Joe Perry noted earlier this morning (and indeed late last week as well), the spread of coronavirus remains the single biggest driver for day-to-day movements across global markets. While the spread of the virus in China is showing signs of stabilizing, at least to the extent official...

Brent Futures Rebound On Supportive Uptrend Line, Bullish View Remains

Brent futures bounced off the short-term ascending trend line on Wednesday, failing to extend the downward move. Currently, the commodity is trying to overcome the 40-day simple moving average (SMA) and the 64.85 resistance level. The RSI turned higher but is still the near 50 level, while the stochastic...