-1704728210.png)
Saudi Arabia Cuts Selling Price
Oil prices came under pressure on Monday as traders digested news of fresh price cuts from de-facto OPEC leader Saudi Arabia. The kingdom slashed the official selling price of its leading product, Arab light crude, it its lowest level in over two years. The price cuts come on the back of data showing that OPEC output rose last month, despite the group announcing a commitment to fresh cuts.
OPEC Divisions
OPEC adherence has been in question recently in light of the recent break from tradition for OPEC. At the last meeting, the group announced fresh cuts though outlined that exact levels would be determined and announced by each member rather than the group of producers adhering to a cartel-wide quota as has typically been seen. There has been plenty of talk of division within OPEC recently with some members pushing back against Saudi’s calls to up production cuts.
USD in Focus
With production rising and the Saudi selling price being cut, oversupply concerns are being negated for now, leading to fresh downside in crude prices. Looking ahead this week, focus will also be on movements within the US Dollar. Thursday’s inflation data has the potential to drive plenty of USD volatility which might see crude prices sold further if the greenback rises.
Technical Views
Crude
The rally in crude prices has stalled for now into a test of the bear channel highs and the 72.61 level. With price now dropping sharply from the level, the focus is on a fresh test of the 66.79 level next. This is a major multi-year support level for the market which, if broken, will mark a firmly bearish development.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.