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BRENT CRUDE OIL FUNDAMENTAL ANALYSISCrude oil: gaining on lower inventories While the broader macro conditions remained complex as hawkish Fed speak and debt ceiling deadlock weighed, crude oil prices managed to inch higher and start the week on a positive note after heavy selling both in paper and physical market over the last few weeks. Supply side news remain mixed with Russian exports remaining firm while OPEC’s early April production cut is only now starting to be felt. Extreme heat across Asia has ramped up demand for fuel oil to run air conditioning and lights while oil traders will be on alert for comments scheduled later today from Saudi Arabian Energy Minister Prince Abdulaziz bin Salman at the Qatar Economic Forum, especially following the recent jump in short selling by funds to levels seen before the April 2 production cut.
OANDA:BCOUSDLong
by thunderpips
UKOIL Analysis: Brent Crude OilThe looming possibility of a US debt ceiling default has sent shockwaves through the financial markets, triggering a series of events that could impact various assets, including commodities like UKOIL (Brent Crude Oil). In this analysis, we will explore the potential implications of a US debt ceiling default on UKOIL and present a trading strategy based on the current market conditions. Analysis: 1. US Debt Ceiling Default Impact: A US debt ceiling default can have far-reaching consequences on global financial markets. Uncertainty and market volatility often drive investors towards safe-haven assets like commodities, particularly crude oil. As a result, we can anticipate increased demand and a potential price surge for UKOIL. 2. Buy Zone: The suggested buy zone for UKOIL, considering the potential effects of a US debt ceiling default, lies between $73.42 and $65.46. This range indicates the levels at which traders could consider entering long positions, anticipating a bullish price movement. 3. Stop Loss: To manage risk, it is crucial to establish a stop loss level. For this analysis, a suggested stop loss level is $61.53. Traders should set their stop-loss orders below this point to protect against adverse price movements. 4. First Target: The first target for UKOIL, considering the potential rise resulting from a US debt ceiling default, is set at $121.22. This level represents a significant upside potential and serves as an initial profit-taking area. 5. Second Target: In the event of a sustained bullish trend, the analysis suggests that UKOIL could potentially reach new all-time highs. The second target is set at $184.53, reflecting the possibility of an extended price surge beyond previous records. Considering the potential impact of a US debt ceiling default on UKOIL, there is a compelling case for a bullish price movement. The suggested buy zone of $73.42 to $65.46 provides an opportunity for traders to enter long positions, while the $61.53 stop loss helps manage risk. The first target of $121.22 offers a profitable exit point, and the potential for UKOIL to reach new all-time highs, with a second target of $184.53, adds an exciting long-term perspective. Disclaimer: This analysis is based on the assumption of a US debt ceiling default and should be considered speculative. Traders and investors should conduct their research, evaluate market conditions, and exercise caution when making financial decisions.
TVC:UKOILLong
by mahmoudbawa
1
BRENT CRUDE OIL FUNDAMENTAL ANALYSISOil prices have remained under pressure over the past month, with Brent crude falling 13.6% amid recession fears in the US and weaker-than-expected economic data out of China. Still-elevated Russian exports and the sizable inventory build at the start of this year due to a milder winter in the Northern Hemisphere have also played a role. We now see the Brent price reaching USD 95 a barrel by the end of this year, down from our previous forecast of USD 105/bbl, as we expect Russian oil output to stay at around 9.6 million barrels per day (mbpd) instead of 9mbpd in the second half of this year. However, this means an upside of over 25% from current levels. We still see several main reasons to expect the oil market to be under supplied in coming months: The International Energy Agency sees robust global oil demand. In its latest monthly oil market report published this week, the Paris-based agency raised its forecast for global 2023 oil demand by 100,000bpd to 102mbpd. It also anticipated tighter market balances in the second half of the year, “when demand is expected to eclipse supply by almost 2mbpd.” While our own forecast puts current global demand at around 101mbpd, we see higher demand in June, boosted by the driving season in the US and more oil being used to generate power to cool down buildings in the Middle East. In fact, we expect the oil market to be undersupplied by nearly 1.5mbpd next month. Inventory draws are set to be more visible in the months ahead. The US Department of Energy said earlier this week that it plans to purchase 3 million barrels of crude oil for the Strategic Petroleum Reserve for delivery in August, after a record sale last year that pushed the level of the reserve to the lowest since 1983. It remains to be seen whether the tender will be concluded, but we expect to see larger inventory draws as the Northern Hemisphere enters summer while the impact of strategic oil reserve release fades. OPEC+ cuts should tighten the market further amid other supply constraints. The voluntary output cut by nine OPEC+ members this month should continue to tighten the market, while wildfires in Canada’s primary oil-producing province Alberta has forced shutdowns of oil and gas production. Iraq’s total oil exports this month are also likely to be limited amid continued suspension of production in the north. We anticipate oil production will fall back toward 100mbpd in May from around 101mbpd in 1Q23. A tighter market should convince financial investors to return to the oil market, thus supporting prices. So, we maintain our most-preferred rating on oil alongside our positive stance on broad commodities. We continue to advise risk-taking investors to add long exposure via first-generation indexes or longer-dated Brent contracts, or to sell Brent’s downside price risk. We also see value in emerging market energy bonds for an attractive yield pickup versus developed market government and investment grade debt.
OANDA:BCOUSDLong
by thunderpips
Crude Oil Analysis: Crude Oil Running on EmptyThe price movements affecting crude oil have been fascinating over the past year and a half. During the period in which many Western governments imposed lockdowns on their population, oil was trading at relatively high prices because of logistical and supply chain difficulties created by enforced stay-at-home orders, whilst nations in Asia such as India, Thailand and Japan continued as normal and required as much of the thick black stuff as possible to keep the wheels of industry turning. Once the folly of lockdowns had tested the patience of most of the Western world and the powers that be could no longer carry them out, everything suddenly went back to normal, but supply chain disruptions continued as the 'work from home' phenomenon was difficult to curtail. Prices remained relatively high. However, in the early months of 2022, many of the same countries that imposed lockdowns began to band together to enforce trade sanctions on the Russian Federation and its industry. One of the largest industries in that particular country is oil extraction and refinement and the production of oil-based energy products. Indeed, Russia is an OPEC+ nation and one of the largest producers and exporters of petrochemical products in the world. These sanctions meant that Russian oil companies could not access their bank accounts in which settlement for oil supply is made; hence many European customers had to begin to settle the supply of oil by Russian companies by paying in Rubles into a bank account in Moscow or face having their supply curtailed. This caused a rise in the price of crude oil and much of Europe to face an energy price crisis in which the cost of heating homes or running vehicles became astronomical. Today, things are somewhat different. The price of crude oil is, compared to a year ago, on the floor. In fact, it is very low compared to even one month ago, and over the five-day moving average until the end of trading on May 12, it is down considerably. On May 2, we witnessed the lowest value of crude oil in over a year, and on May 12, the second lowest since May 2. Brent Crude Oil is down 3.4% over the past five days and a staggering 29.9% in a year. Oil is an interesting asset class, however. This is because it is one of the only consumable commodities that exists. Gold and other precious metals do have an engineering use case, but they are really seen as stores of value as far as investment and trading are concerned, whereas oil is bought and sold entirely for the purpose of use as an energy product; therefore, its value is affected by supply and demand. Right now, many OPEC nations are in the midst of an oil production slowdown. For the month of April, Nigeria's oil production was below 1 million barrels per day, representing its lowest level in 7 months. Saudi Arabia, Iraq and a few other oil-producing nations in the Middle East have been cutting oil production by one million barrels of oil a day, and Russia is set to extend its reduction in production to half a million barrels per day until the end of 2023. As is to be expected, the US Government has criticised this move, but the OPEC nations, which are responsible for the supply of over 30% of the world's oil, are known for being able to control the market to protect the combined value of their assets. In October 2022, the last time a cut in production was conducted by oil-producing nations, an increase in value of 5% took place. This reduction in production is being viewed as a means of curtailing supply to ramp up the price of crude oil; therefore, following the price of crude oil is likely to be interesting given its low value now and potentially high value once the cut has taken place. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:XBRUSD
by FXOpen