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The Petrodollar Agreement and the Future of OilThe term "petrodollar" refers to the value of oil bought with U.S. dollars. This concept was founded in 1974 when Saudi Arabia and the United States made an agreement to price Saudi oil exports exclusively in U.S. dollars. This arrangement had significant effects on the global economy and politics. This system increased the global demand for U.S. dollars. Oil-exporting countries like Saudi Arabia committed to selling oil only in dollars, forcing other countries needing oil to acquire U.S. dollars for transactions. This continuous demand strengthened the value of the dollar in global markets. This system also led to the widespread use of the dollar. Since oil is a strategic commodity used worldwide, the need for dollars to buy oil pushed countries to hold large reserves of dollars. This includes central banks and major companies that rely on importing oil to meet their needs. Due to the increased demand and continuous use of the dollar, its value became stable. When there is a high and steady demand for a currency, its price fluctuations decrease, making it a stable and reliable currency for international trade. This stability enhanced the dollar's position as the world's main reserve currency. Why Is the World Watching Now? Recent geopolitical developments and changes in global alliances have sparked discussions about Saudi Arabia's role in the petrodollar system. Major economies like China and the European Union are emerging as key players in global oil markets, and there are serious and successful attempts to price oil in their currencies. The BRICS aims to launch a new global economic system, and the idea of pricing oil in non-dollar currencies has been proposed. This idea is not just a theoretical study but is based on tangible real-world evidence. After the Russian war on Ukraine and the subsequent economic sanctions from the U.S. and the West, Russia announced it would sell its oil in rubles under certain conditions. In March 2023, a deal was made for Russia to sell oil to India, with payment in rubles. In the same month, Saudi Arabia announced its intention to consider exporting part of its oil to China in yuan. The United Arab Emirates took the first step in this field by pricing gas in Chinese yuan. Last year, the Shanghai Stock Exchange announced the pricing of a shipment of Emirati gas in Chinese currency. The UAE did not immediately announce whether it would continue pricing part of its liquefied gas exports in yuan on the Shanghai Stock Exchange or if it was just testing the global market's reaction to this move. Benefits for the UAE and China For the UAE, the benefits include diversifying revenue sources and reducing reliance on the U.S. dollar. This move strengthens economic ties with China, the world's second-largest economy, opening up more opportunities for cooperation and joint investments. It also represents a strategic step towards achieving greater flexibility in international financial and trade dealings. For China, this move enhances the yuan's position as an international currency, contributing to reducing reliance on the U.S. dollar in global trade. By pricing oil and gas in yuan, China can secure energy supplies with its local currency, reducing currency conversion costs and helping to enhance internal financial stability. Impact on the Dollar A crucial point is the global push towards renewable energy and the potential decrease in oil demand, which can significantly affect the dynamics of the petrodollar system. As the world seeks to shift to cleaner and more sustainable energy sources, the importance of oil—and thus the petrodollar—may diminish in the global economy. Additionally, the changing political landscape, including shifts in U.S. foreign policies and Saudi Arabia's strengthening relations with other global powers, may lead to a reevaluation of the petrodollar arrangement. These political shifts might prompt Saudi Arabia and other countries to consider using alternative currencies in oil trade. Vision for Diversification Saudi Arabia and the United Arab Emirates aim to diversify their economies away from oil dependence to achieve long-term economic sustainability and reduce risks associated with global oil price fluctuations. Saudi Arabia's "Vision 2030" aims to diversify income sources and develop new economic sectors such as tourism, entertainment, industry, technology, and education. This program aims to create new job opportunities, attract foreign investments, and achieve comprehensive and sustainable economic growth. The UAE focuses on developing sectors such as tourism, aviation, trade, finance, technology, real estate, education, and renewable energy. Through this vision, the UAE seeks to strengthen its position as a global hub in various fields, which it has largely succeeded in so far, and reduce its reliance on oil as a main part of its economy. In summary, the world is closely watching Saudi Arabia and its allies because any changes in their approach to oil trade and currency preferences can have widespread effects on global financial markets, the strength of the U.S. dollar, and international economic relations.
TVC:UKOIL
by bbitar
BRENT. Weekly trading levels 10.06.2024 - 14.06.2024During the week you can trade from these price levels. Finding the entry point into a transaction and its support is up to you, depending on your trading style and the development of the situation. Zones show preferred price ranges WHERE to look for an entry point into a trade. If you expect any medium-term price movements, then most likely they will start from one of the zones. Levels are valid for a week, the date is in the title. Next week I will adjust the levels based on new data and publish a new post. ! Please note that brokers have a difference in quotes, take this into account when trading. The history of level development can be seen in my previous posts. They cannot be edited or deleted. Everything is fair. :) ---------------------------------------------- I don’t play guess the direction (that’s why there are no directional arrows), but zones (levels) are used for trading. We wait for the zone to approach, watch the reaction, and enter the trade. Levels are drawn based on volumes and data from the CME. They are used as areas of interest for trading. Traded as classic support/resistance levels. We see the reaction to the rebound, we trade the rebound. We see a breakout and continue to trade on a rollback to the level. The worst option is if we revolve around the zone in a flat. Do not reverse the market at every level; if there is a trend movement, consider it as an opportunity to continue the movement. Until the price has drawn a reversal pattern. Don't forget to like Rocket and Subscribe!!! Feedback is very important to me!
OANDA:BCOUSD
by Forex_Hoby
Traders, managers and loss aversion in investment banking█  Traders, managers and loss aversion in investment banking In investment banking institutions, traders and managers exert immense pressure to maximize gains while minimizing losses. In fact, loss aversion, the tendency to prefer avoiding losses over acquiring equivalent gains, is what influences most of their decision-making. If not managed effectively, this bias can lead to suboptimal trading decisions and significantly impact the overall performance of financial institutions. This comprehensive field study by Willmana et al., "Traders, Managers, and Loss Aversion in Investment Banking," examines how loss aversion manifests among traders and managers in four major investment banks. The study integrates insights from agency theory and prospect theory to explore the risk management strategies employed by both groups. █  Background and Theory Two critical theories, agency theory, and prospect theory, help explain how individuals within these institutions make decisions. Agency Theory: This theory deals with the relationship between principals (e.g., shareholders) and agents (e.g., managers and traders). It posits that agents employed to make decisions on behalf of principals may not always act in the principal's best interests due to differing goals and risk appetites. For instance, if you're a trader, you might engage in riskier behavior to maximize your bonuses. At the same time, your managers might prioritize stability and risk mitigation to protect their positions. Prospect Theory: Introduced by Daniel Kahneman and Amos Tversky, prospect theory describes how people choose between probabilistic alternatives that involve risk. It highlights two main biases: loss aversion and the framing effect. Loss aversion is the tendency to prefer avoiding losses over acquiring equivalent gains, and the framing effect shows that the way a problem or decision is presented can significantly impact choices. █  Explanation of Risk Aversion and Loss Aversion Risk Aversion: It is the preference for certainty over uncertainty. In the context of trading, risk-averse individuals prefer investments with lower risk and potentially lower returns over those with higher risk and higher potential returns. Loss Aversion: A central component of prospect theory, loss aversion suggests that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. This bias can lead traders to hold onto losing positions longer than is rational and to sell winning positions too quickly, seeking to lock in gains and avoid realizing losses. █  Methodology The study by Willmana et al. utilizes a qualitative research approach, focusing on detailed interviews to gather insights into the behaviors and attitudes of traders and managers in investment banking. The researchers interviewed 118 traders and managers across four leading investment banks. These interviews included questions about motivations, emotions, trading strategies, organizational culture, and experiences with gains and losses. Additionally, 10 senior managers participated in the management interview section, providing a broader perspective on organizational practices and controls. █  Key Findings Managers are primarily concerned with mitigating losses rather than maximizing gains. Position holders tend to intervene more aggressively when traders experience losses, emphasizing the need to cut losing positions quickly to prevent further deterioration. The study found that managers used veto power primarily to reduce risk. As one manager said, "My veto works only one way—to reduce risk." Managers frequently highlighted the importance of controlling downside risk. One manager noted, "My role as a manager is to cover the downside rather than the upside. I try to enforce the discipline of cutting losses rather than pushing them to add to positions." ⚪ Differences in Risk Management Strategies The study revealed traders often operate with significant autonomy and tend to take on more risk, particularly in pursuing higher bonuses. Conversely, managers focus on ensuring that risk levels remain within acceptable limits, stepping in mainly to curtail losses. The research showed that managers are generally ex-traders who understand the technical complexities of trading. However, their managerial role shifts their focus towards risk containment. One trader mentioned, "95% of the time, managers are traders who have been in the business a long time and they have no real management skills." Traders have a strong ethos of autonomy, with managers intervening only when necessary. A manager noted, "I consider I have a veto on any positions my traders take, even when they are within their limits. But, to give you an idea, I think last year I used it once, the year before twice, and this year, not at all." ⚪ Impact of Bonus Structures and Incentive Systems The study found that these systems often drive traders to take on higher risks to achieve performance targets, especially as the year-end approaches. Over half of the traders in the sample earned over £300,000 per annum, with bonuses constituting a significant portion of their total compensation. The direction of risk-bearing behavior varied among traders toward the end of the compensation year. Some traders became risk-averse to protect their gains, while others increased their risk tolerance. One trader stated, "Risk tolerance becomes infinite at the end of the year because we don't have any personal exposure to our results in the last couple of months; we can almost become less discriminating in the trades we put on." █ Practical Implications for Retail Traders Retail traders can draw several practical implications from the findings of this study: ⚪ Awareness of Loss Aversion: Retail traders should recognize their own tendencies towards loss aversion and implement strategies to manage this bias. This might include setting predefined stop-loss limits and adhering to them strictly to avoid letting losses run. ⚪ Structured Risk Management: Just as investment bank managers focus on controlling downside risk, retail traders should establish clear risk management frameworks. This includes setting risk limits for each trade and not deviating from these limits based on emotional responses. ⚪ Balanced Focus on Gains and Losses: While avoiding losses is crucial, retail traders should also develop strategies to maximize gains. This involves identifying opportunities for larger positions when the probability of success is high, without succumbing to undue caution after achieving small gains. ⚪ Bonus and Reward Systems: Retail traders should design their own reward systems to align with their trading goals. For instance, setting incremental performance targets and rewarding themselves upon achieving these can help maintain motivation and discipline. ⚪ Continuous Learning and Adaptation: Managers in investment banks often act as mentors, providing guidance based on their experience. Retail traders should seek out mentorship or peer support to learn from more experienced traders. Participating in trading communities and continuous education can help improve trading performance over time. █ Applying Knowledge from the Study Retail traders can apply the knowledge derived from this study in several ways: ⚪ Develop a Trading Plan: Create a comprehensive trading plan that includes risk management rules, entry and exit strategies, and guidelines for handling losses. Regularly review and update this plan based on trading performance and market conditions. ⚪ Implement Risk Controls: Use tools such as stop-loss orders, position sizing strategies, and diversification to manage risk effectively. Ensure that these controls are strictly followed to prevent emotional trading decisions. ⚪ Monitor Performance and Adjust: Regularly review trading performance to identify patterns of loss aversion or risk-seeking behavior. Use this analysis to adjust trading strategies and improve decision-making processes. ⚪ Seek Continuous Improvement: Engage in ongoing education through books, courses, and trading simulations. Stay updated on market trends and behavioral finance insights to refine trading strategies continuously. By understanding the dynamics of loss aversion and the importance of structured risk management, retail traders can enhance their trading discipline and improve their chances of long-term success. █  Reference Willman, P., Fenton-O’Creevy, M., Nicholson, N., & Soane, E. (2002). Traders, managers and loss aversion in investment banking: A field study. Accounting, Organizations and Society, 27(1-2), 85-98. doi:10.1016/S0361-3682(01)00029-0. ----------------- Disclaimer This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
OANDA:BCOUSDEducation
by Zeiierman
Goldman Sachs Predicts a Rise in Brent Crude Oil PricesGoldman Sachs Predicts a Rise in Brent Crude Oil Prices According to CNBC, Goldman Sachs analysts believe that Brent crude oil prices should increase in the third quarter due to summer fuel demand leading to a “significant” deficit—approximately 1.3 million barrels per day. They forecast that the price of Brent could rise to $86 per barrel with a “ceiling” around $90. This implies an approximate +7% increase from current levels and a continued rise from the low set on 4 June. How realistic is this? Technical analysis of the XBR/USD chart indicates that: → In the long term, Brent crude oil prices are forming oscillations with diminishing amplitude—pattern A-B-C-D-E. This is a large-scale narrowing triangle, reflecting the balance of supply and demand around the median level, which is approximately around $83.50. This balance has been apparent since 2023. → A sharp bullish reversal and rise from the lower line indicates strong demand for Brent crude below $78. → Yesterday, bulls broke through the former support at $80.40 after an intraday correction, confirming their dominance. If the bullish momentum doesn’t completely fade around the median line of the narrowing triangle, technically, the price of Brent crude oil could reach its upper boundary, which coincides with the ceiling forecasted by Goldman Sachs analysts. Additionally, inflation news could have a significant impact on the XBR/USD exchange rate—the Consumer Price Index (CPI) release is scheduled for tomorrow at 15:30 GMT+3. Start trading commodity CFDs with tight spreads. Open your trading account now or learn more about trading commodity CFDs with FXOpen. 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
2
"Crude Awakening: Analyzing the possible Surge in Oil Prices""Oil: No place to go but up" A chart off oil for the last 50 years has never further deviated from its standard deviation compared over the cost of a risk-free asset such as the "US10Y". This chart has only once ever reached its 2nd standard deviation once in the last 50 years. Let first take a look at the first scenario to get a brief understanding of what this would mean for oil. Not to be ignored but equities, economics and politics combined. Going back to an iconic year, the beginning of 1999. Nearing the end of the most significant bull run in equities history lasting 2 decades. Would see the S&P go up 10-fold from $100 to over $1000usd. To understand what would lead oil to deviate so far below its mean we would need to understand what lead the S&P to perform so well. Of course, this would be situation of what some would say "the stars to align" and what would later be referred to as the "Goldy Locks Zone". At the for front was low geopolitical conflict, no major wars and economic stability would of course prime the events in which would occur. Pulling the hood back and looking at what would be driving this surge in growth in the economy and equities would be a lagging effect of the USD no longer being backed by gold and this being matched with the lowering of interest rates. This 20-year period of low interest rates, lowering unemployment and lowering inflation would lead to a primed economy for growth in equities which in fact would negatively impact the price of such commodities as GOLD and Oil. This would see oil reach (unbeknownst to the people of its time) its 2nd standard deviation withing a 50-year period when oils compared to a risk-free asset "government bonds". It was soon to be know after as what was the beginning of some would refer to as a "Lost Decade". In which 10 years later to the day if you had bought the S&P 500 SP:SPX you would still be down a whole 45%. The Dow Jones Industrial average TVC:DJI was down 35%. Other well known and sort after companies such as Amazon NASDAQ:AMZN had lost up to 93% and were still to be down 53% at bottom of the GFC all that 10 years later. TVC:GOLD It was not be all bad news, as some markets did perform dramatically and make a recovery. Gold would once again become highly sort after. At the start of the lost decade gold had been in a bear market for over 20 years. Since it was last sitting at all-time highs of $860 USD/OZ Gold lost a incredible 67% of its value and was sitting around $280 USD/OZ all that 20 years later. In the years to come people of its time would see gold have one of its most memorable bull runs. Throughout the next 10 years gold would break past its previous all-time high push up and past $1000 USD/OZ a 250% return only to be short lived. Being drawn down with the rest of markets and by the end of the 10-year period gold still stood at $715 USD/OZ and still up 150%. TVC:UKOIL Oil would also make history in its dramatic bull run starting at $10USD per barrel after two decades of price decline would later go on to form a huge bubble in oil and its price to top out at incredible $150 USD a Barrel and insane 1,500% only for its bubble to burst due to the GFC and return its pricing back to reality off less than 1/3rd of its previous pricing and found the bottom of the crash at less than $50 USD per Barrel. Still to be up 300% and far outperforming equities. The second thing to understand about this comparison is to understand is the US10Y and its relationship to interest rates, inflation and the unemployment rate. As you can see there is a high degree of correlation within these three metrics. US10y interest rates and inflation. The correlation these have with Unemployment is usually the inverse relationship. As unemployment goes up these tend to come down with interest rates being lowered as a measure to try stimulate the economy. The inverse relationship With unemployment looking to tick up it is expected that interest rates will not proceed higher therefore the US10Y to come down when the government decide unemployment is getting too big a tail wind. The previous time the comparison was at its standard two deviation the unemployment rate had almost two years before unemployment rising would become a problem. So the government tried to cut rates possibly a little too early which lead to oil beginning to surge and being a main driver in inflation, inflation once again began to rise which again caused the government to raise rates again only to set of unemployment and rates to come down which in this case brought inflation down with it and what was to be the burst of the tech bubble that sent the economy spiralling back to reality. However, in this scenario with unemployment rising already then, the possibility for unemployment rates to go out of control then raising rates therefore causing the US10Y to go higher seems to be out of the question. The only way $UKOIL/US10Y could possibly go lower is if the price of oil proceeds lowers or if the price of oil remains and the US10Y goes higher. Which is not to say it is possible for this comparison to reach its 3rd or fourth standard deviation it just becomes more and more of an anomaly and is generally short lived met with high volatility. This box highlights a more alike scenario of unemployment rising, inflation being tamed a little, rates hikes being kept stable and the UKOIL/US10Y comparison finding on its average. Another observation is off oil being on its long-term support trendline. Also Finding support on top of its Along-term average. Another chart that could also be a protagonist for an increase in oil or vice versa oil being a protagonist for increase in Energy is a false breakout only to be currently trading back up on top of it 50% retracement from its current highs is the S&P energy sector. Obviously, nothing is of certain and to react and not to predict. So, a bounce or rejection of these levels is something that may want to be watched.
TVC:UKOILLong
by Ryan1993
Brent Crude (UK Oil) moving lower this week**Monthly Chart** Brent Crude (spot) - UKOil, last month's candle closed lower after testing the previous month's key reversal, this indicated that UKOil is going to continue its move lower. This month's candle which is still active, has opened from the bearish closed candle of May and started moving lower. However, the pair is moving within a long-term range as per the monthly timeframe. **Weekly Chart** Last week candle opened lower. However, it paused around the 77 level, the previous demand zone then moved higher to the 82 level (round number) and rejected it. Therefore, the expectation as per the weekly chart that the move will be bearish for this week. The next target to be tested is the monthly low around the 72 level. **Daily Chart** As per the daily, the price tested the relative equal lows on the daily and started moving higher. However, due to NFP last Friday, the price started moving lower after testing the FVG (or IPA) candle around 82 level and then started moving lower. For this week, I would like to see more price action to provide a good setup to sell this UKOil and move it to test the 72 level given the change in market structure in the lower timeframes.
PEPPERSTONE:SPOTBRENTShort
by PropSignals
BRENT. Weekly trading levels 3.06.2024 - 7.06.2024During the week you can trade from these price levels. Finding the entry point into a transaction and its support is up to you, depending on your trading style and the development of the situation. Zones show preferred price ranges WHERE to look for an entry point into a trade. If you expect any medium-term price movements, then most likely they will start from one of the zones. Levels are valid for a week, the date is in the title. Next week I will adjust the levels based on new data and publish a new post. ! Please note that brokers have a difference in quotes, take this into account when trading. The history of level development can be seen in my previous posts. They cannot be edited or deleted. Everything is fair. :) ---------------------------------------------- I don’t play guess the direction (that’s why there are no directional arrows), but zones (levels) are used for trading. We wait for the zone to approach, watch the reaction, and enter the trade. Levels are drawn based on volumes and data from the CME. They are used as areas of interest for trading. Traded as classic support/resistance levels. We see the reaction to the rebound, we trade the rebound. We see a breakout and continue to trade on a rollback to the level. The worst option is if we revolve around the zone in a flat. Do not reverse the market at every level; if there is a trend movement, consider it as an opportunity to continue the movement. Until the price has drawn a reversal pattern. Don't forget to like Rocket and Subscribe!!! Feedback is very important to me!
OANDA:BCOUSD
by Forex_Hoby
What are FreshForex traders profiting from?This week, the financial news market is buzzing with mixed events. Oil prices continue to fall, while American stocks are delighting investors with unexpected rises. FreshForex traders have quickly capitalized on these events to make profits. Let's take a closer look at what’s happening and why. Black gold is getting cheaper At the beginning of this week, oil prices fell again, causing concern among investors. Market volatility is increasing due to fears about future demand and a possible easing of production restrictions by OPEC+ by the end of the year. Brent crude oil fell below $77 per barrel on Tuesday! Oil prices declined following decisions made by OPEC+ at their June 2 meeting. The organization announced a gradual lifting of oil production restrictions, affecting market sentiment. Moreover, disappointing figures from the US manufacturing PMI (ISM) also played a role: at the end of May, the index dropped below 50 points to 48.7, indicating a decline in the sector. The rise in borrowing costs, limited investments, and increased raw material costs are challenging American industry. Experts are divided: Goldman Sachs sees potentially negative consequences for the market from OPEC+'s decision, while UBS and RBC analysts believe that the cartel will manage the market flexibly, gradually easing restrictions. Rises in the US stock market Meanwhile, optimism reigns in the US stock market. The price of tech giant Apple (#Apple) exceeded a 5-month high , surprising Wall Street once again. The company’s profits surpassed expectations, causing a buzz among investors that continues to this day. Microsoft (#Microsoft) shares continue to rise . Microsoft is developing and training its own AI model, MAI-1, which could compete with models from Google, Anthropic, and even OpenAI, according to a Yahoo report. The company's first-quarter revenues were supported by high demand for AI products. Micron (#Micron) shares are soaring . The company is poised to become one of the largest beneficiaries of AI demand in the chip industry. Micron announced strong quarterly results and an optimistic earnings forecast for the current quarter. Once again, GameStop Corp (#GameStop) became sensational news . As we mentioned earlier, the company’s shares soared following new content from popular YouTube streamer Keith Gill, known as Roaring Kitty. In a recent Reddit post, Gill shared a screenshot of his investment portfolio, which included a significant holding of GameStop shares and call options. This information sparked another explosive interest in the stock, doubling its price to $47 on the New York Stock Exchange (NYSE) on Monday, June 3. We already mentioned GameStop in May, so for our regular readers and active traders, the latest surge was no surprise. Boldly join the world of financial opportunities and start earning today. Our 101% protective bonus on deposits will give you more confidence in your trades!
BLACKBULL:BRENT
by Fresh-Forexcast2004
Oil May Correct UpOil prices dropped more than $1 on Tuesday due to skepticism over an OPEC+ decision to increase supply later this year, amidst already weak global demand. Extending losses from the previous session, Brent crude futures fell $1.11, or 1.4%, to $77.25 a barrel, hitting a low of $76.76. U.S. West Texas Intermediate (WTI) crude futures declined by $1.09, or 1.5%, to $73.13. OPEC+ agreed on Sunday to extend most oil output cuts into 2025 but allowed for gradual unwinding of voluntary cuts from October. This raised concerns about oversupply, especially with high interest rates and weak economic signals from the U.S., China, and Europe affecting oil demand. Non-OPEC producers, particularly the U.S., are also increasing supply. Market strategist Yeap Jun Rong noted that further evidence of economic weakness could push oil prices even lower. The U.S. government is set to release inventory and demand data on Wednesday, which will indicate gasoline consumption during the Memorial Day weekend, marking the start of the U.S. driving season.
CFI:BRENTLong
by sabiotrade
A rebound in Crude Oil prices is on the horizon.Since the beginning of the month, there have been signs that crude oil has been falling and this has continued into today's Asian opening at a total of -9.11%. OPEC+ (OPEC with Russia and its allies) wanted to impress the market by extending the mandatory cuts, but the market has turned its attention to the voluntary cuts. The reversal of these cuts has set off a chain of unparalleled bearish movements that have pushed the value of Brent crude from its recent highs of $84.66 to a low of $76.71 a barrel. It is clear that this weekend's meeting was aimed at giving an image of solidity, prolonging, as we said, these cuts and showing a certain unanimity. But Monday's 4% drop on Monday has continued to generate a “Technical Abyss”. Both West Texas and Brent are close to this year's lows. The market reaction has clearly been depressing for any oil producer, and this will obviously help consumers to rejoice. After such a contrary outcome, it would be foreseeable that they will gradually reverse the voluntary cuts, at least looking ahead to October of this year since they started the cuts in November of last year. If we look at it in aggregate terms, what OPEC+ has done is to start opening the taps and estimates indicate that by 2025 Russia and the United Arab Emirates will be producing 100,000 barrels more than at present, and Saudi Arabia will be producing around 500,000 barrels more. Surprisingly, inventories have surprised expectations on the upside and there are now downside risks to the $75 to $90 range for Brent according to analysts at Goldman Sachs. The same has occurred in other commodities, which have fallen around 1%, as is the case of copper and iron, and only aluminum and copper saved the session in positive territory. The latter has experienced an intense plunge of 8% since it reached its highs. If we look at the chart, yesterday's and today's downward movement has closed a price movement that began in February. Now we will have to see if this movement continues, but the RSI is marking 15.02% oversold, which could be marking a possible correction to the $82 area. Ion Jauregui - ActivTrades Analyst ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
ACTIVTRADES:BRENTLong
by ActivTrades
Brent Oil Slides Despite OPEC+ CutsOPEC and allies including Russia, have been implementing a series of supply reductions since late-2022, which have helped support oil prices and on Sunday they agreed to prolong those curbs . Around 3.66 million barrels (mbpd) of cuts that were due to expire at the end of the year were rolled over into 2025. The most recent tranche of 2.2 mbpd that would expire at the end of the month was extended into Q3 and will be phased of gradually after that. The decision keeps current total reduction cuts at nearly 5.9 mbpd and almost 6% of global output. On the other hand, members will start tapering some of those curbs over a 12-month period starting in the fourth quarter and the detailed plan could hinder their ability to keep output lower, if such need arises. Furthermore, the group sidestepped the contentious issue of capacity, while compliance has generally been loose in the past. Brent oil slumps following the decision, as output will start to go up from October, just as non-OPEC countries like the US keep pumping oil. At the same time, demand growth is expected to decelerate sharply this year. Optimism for Middle East ceasefire, along with poor China PMIs, also contributed. UKOil is now exposed to this year’s lows (74.76), although breaching those of 2023 (70.09) is a much harder task. However, the deep output cuts by OPEC+ will lead to tighter market at least in the near term and this can continue to support oil prices. Furthermore, central banks are moving towards less restrictive monetary policies, which can also help. On the technical side, the RSI points to extremely oversold conditions that can contain the fall and give UKOil the opportunity to rebound. A return above the EMA200 (blackline) that would pause the bearish bias would need strong catalyst though and the upside is unfriendly. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
FX:UKOILLong
by FXCM
POTENTIAL LONG OPPORTUNITY ON CRUDE OIL (BCOUSD) Hey everyone! Hope you're doing awesome! Just wanted to get on here and do a post on some potential upside I see here on Brent Crude Oil after today's price action! SO as you can see price has had a hard time breaking past the lows of 81.50-82.00 price handle. Price came down into daily demand and tried breaking lower to downside but now for the 3rd time being rejected to the upside...with buyers buying up this price not allowing it to go lower. This leads me to believe that there could potentially be a upside move for the next move for Crude Oil. Obviously you can see on the 1D (DAILY) timeframe right now the market is overall bearish...but price has now failed to make that new LL showing me potential for an overall pullback on this commodity. ALSO if you look at the 1W (WEEKLY) timeframe you can see that price is actually creating subtle higher lows in price (buyers taking worse prices) which displays to me a demand for this product and a next likely move being to the upside. On the hourly timeframes now you can see a shift to a bullish market which also gives the bias of the next move on this commodity being to the upside to upside supply around the $87 price point. Hope this brough some value to you guys! Please boost this post and follow my page for more accurate analysis! Cheers!
OANDA:BCOUSDLong
by JosePips