{"TechnicalAnalysis":{"title":"Weekly Crude Oil Inventories Report","content":"

Crude oil prices this week turned lower once again despite the latest data from the Energy Information Administration, released yesterday, showing that US crude stocks experienced a less than expected drawdown.<\/p>\r\n

In the week ending December 7th,\u00a0\u00a0<\/sup>crude oil inventories fell by 1.2 million barrels, much less than the forecast 10.18 million barrels. This just the second weekly drawdown of the last ten weeks and while it is certainly a move in the right direction, it is far less than the 10.18 million barrels that crude bulls were hoping for.<\/p>\r\n[shortcode-variables slug=\"trump-affect-oil-openaccount\"]\r\n

Opposing Market Forces<\/strong><\/h2>\r\n

The stagnant price action in crude this week reflects the opposing market forces which traders are currently battling. On the one hand, prices have been buoyed by news of a successful OPEC meeting last week, resulting in the announcement of a 1 million + barrels per day reduction in crude production to start in January.<\/p>\r\n

On the other, traders are still dealing with the fact that oil prices continue to sit at the bottom of a 30% decline, and traders are\u00a0skeptical\u00a0about the likelihood of the OPEC deal going ahead as expected.<\/p>\r\n

OPEC has often struggled with successfully implementing agreed cuts and increases in production with disobedience being the key hurdle. The jealousy and competition among OPEC\u2019s members mean that there is often a lot of foul play and it could be that we see some members covertly keeping production at or near current level, not honoring the cut.<\/p>\r\n\r\n

Russia & Other Nations to Reduce Output Also<\/strong><\/h2>\r\n

In terms of how the reductions will work, OPEC has announced that its members will be responsible for a combined reduction of around 800k barrels per day<\/a> while a group of OPEC\u2019s allies, led by Russia, has agreed to a combined cut of around 400k barrels per day.<\/p>\r\n

One major issue still standing in the way of a proper recovery in oil prices, is that of surging US production. Crude oil production in the US has risen to record high levels over recent months and shows no sign of slowing down.<\/p>\r\n

Many question the influence the President is having on production in the US given his constant calls for lower prices over recent months. The President has been particularly vocal on his Twitter feed where he has consistently called on Saudi Arabia and OPEC to increase production in a bid to keep prices low. Trump has yet to make any official comment on the oil cuts, but he certainly won\u2019t be pleased with such news.<\/p>\r\n\r\n

Gradual Reduction Raises Doubts About Impact of The Cuts<\/strong><\/h2>\r\n

Furthermore, although Russia has agreed to a production cut it has said that its own reduction in output will be down at a slow and gradual pace meaning they won't simply cut production at once. If other oil producing nations involved in the deal adopt a similar approach, this means the impact of the production cuts will be far less potent.<\/p>\r\n

Indeed, market skepticism over the likelihood of these cuts going ahead as planned can be seen in the latest institutional positioning data<\/a> with asset managers having slashed long positions in crude to three-year lows since the beginning of December despite news of the deal.<\/p>\r\n\r\n

Technical Perspective<\/strong><\/h2>\r\n

\"us<\/a><\/p>\r\n

The chart clearly shows the severity of the declines in oil, and despite crude having been able to find support at the 50.96 level, prices have once again turned lower and are now testing the level again. If we see a break below this level, we have open water down to the 40.48 \u2013 42.25 level where we have confluence between a raft of prior swing lows, as well as the completion of a large ABCD symmetry pattern, offering support.<\/p>\r\n[shortcode-variables slug=\"tradingoil\"]","date":"2018-12-13 13:18:12","link":"https:\/\/www.orbex.com\/blog\/?p=69577","image":"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2018\/09\/crude-oil2.png","category_url":"https:\/\/www.orbex.com\/blog\/en\/category\/technical-analysis"},"FundamentalAnalysis":{"title":"Orbex Market Flash","content":"

Despite expectations of a weaker figure due to the dramatic slump in oil prices over the last two months, US CPI remained broadly unchanged over last month.<\/p>\r\n

The headline CPI reading for November, reflected the weakness in energy markets, registering a decline from the prior month\u2019s 2.5% reading. However, core CPI was actually higher over the month, printing 2.2%, up from 2.1% prior.<\/p>\r\n[shortcode-variables slug=\"fomc\"]\r\n\r\n\"fomc\"<\/a>\r\n

While inflation is managing to hold steady for now, the outlook isn\u2019t great as expectations of slower growth both at home and abroad are clouding the horizon. US producer prices data for November, also released this week, rose just 0.1% on the month, down sharply from the prior month\u2019s 0.6%, while the Fed\u2019s main inflation gauge, the PCE index, rose just 1.8%, marking its smallest monthly increase since February.<\/p>\r\n

While news of the planned production cut<\/a> among OPEC and its allied nations holds the potential to buoy prices next year, there are heavy reservations about whether such cuts can be effectively implemented and whether they will be enough to curb the tide of surging US oil production which has been putting pressure on prices<\/a>. Further declines in oil will weigh heavily on the inflation outlook for Q1 2019 if they materialize.<\/p>\r\n\r\n

Technical Perspective<\/strong><\/h2>\r\n\"usd<\/a>\r\n

The USD Index remains penned in against the 96.91 level resistance which has capped price over the last six months or so. If we can break above here the next level to watch will be the 100-mark, a key psychological and structural level which also holds the completion of a large symmetry objective. To the downside, the 96.19 level is the first key support zone.<\/p>\r\n[shortcode-variables slug=\"trade-usd-movement-open-account\"]","date":"2018-12-13 16:08:48","link":"https:\/\/www.orbex.com\/blog\/?p=69595","image":"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2018\/12\/oik-1.jpg","category_url":"https:\/\/www.orbex.com\/blog\/en\/category\/fundamental-analysis"},"Webinars":{"title":"\"Trading the FOMC\" webinar","content":"Get ready for the Trading The FOMC<\/em> webinar!<\/strong>\r\n\r\nJoin us for this special Orbex trading event where two of our key analysts, James Harte and Richard Tataru, will be covering the December FOMC meeting live. How will the markets react with a potential rate hike in sight?\r\n\r\nThirty minutes ahead of the decision, James and Richard will be giving a fundamental and technical overview of the event discussing what we have seen in recent data and market expectations ahead of the meeting as well as highlighting key technical levels to watch. Our two analysts will then stick around to take in the rate decision live, discussing the market reaction and fundamental implications for the US Dollar and the broader market.\r\n\r\nWith the structures located at crucial points, trends could change, and the USD could be prepared to shock the markets. Forex Majors, Metals and Indices would be directly affected by this highly anticipated event.\r\n\r\nWhy should you attend?<\/em><\/strong>\r\n

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  • Get insights from our certified analysts about the opportunities and risks in short-term and long-term<\/li>\r\n \t
  • Join the Orbex trading community<\/li>\r\n \t
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  • And so much more!<\/li>\r\n<\/ul>\r\nRegister now to attend our webinar. Trading The FOMC<\/em> webinar is coming!<\/strong>\r\n\r\nAttendance for this webinar is free, but registration is required!\r\n\r\n\r\n\r\n[advanced_iframe src=\"https:\/\/www.orbex.com\/en\/webinars\/goToWebinarIframe?webinar_id=4154055380695739149&amp;ref_id=\" width=\"100%\" height=\"600\"]","date":"2018-12-19","link":"https:\/\/www.orbex.com\/blog\/?p=69128","image":"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2018\/12\/Blog-Post-1.png","category_url":"https:\/\/www.orbex.com\/blog\/en\/category\/forex-library\/webinars"}}