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Rumors make Oil go up

Author: Dmitriy Gurkovskiy, Chief Analyst at RoboForex

The oil market has another reason to recover. At the beginning of last week, they were selling oil because there were rumors that Russia had no interest to extend the OPEC+ agreement, but at the end of it the price movement direction changed to the opposite. Saudi Arabia announced that Russia would support the OPEC+ agreement extension after March 2018.

The closer November 30th is, when the OPEC is going to have a meeting in Vienna, the more doubts investors have about future announcements and actions. Saudis say that the decision on the agreement will be announced during the meeting in Austria. “Oil bulls” like this possibility, but mostly because of hopelessness and lack of options: everybody knows that the organization has no plan “B”.

The latest statistics from Baker Hughes published last Friday shows that by November 17th the Rig Count has increased by 8 and now equals 915 units. All 8 are gas rigs; the number of oil rigs hasn’t changed. It turns out that the shale oil sector is still in stagnation phase. It’s very unlikely that shale oil producers are afraid of the current commodity prices, because they look quite balanced and help to keep the production profitable. Financing may be a problem, because shale deposits can’t be suspended. If a deposit is stopped, all operations will have to start anew.

A factor that may slow down “bulls” this week will be the updated API weekly crude oil stock report. The previous readings showed increase in stocks, which is reasonable as far as both seasonal factor and oil demand/supply balance are concerned.

From the technical point of view, the short-term trend for Brent is bearish, but the dominating one is still bullish. The short-term decline may move towards 60.30, because this area is a support level for both short- and long-term tendencies. If the price rebounds from this level, it may start a new rising impulse with the targets near the current high at 64.75 and the upside border of the long-term rising channel at 66.50.

Attention!

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

 

 

 

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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