Crude Oil Prices Extend Drop as OPEC Struggles with Reducing Glut

Talking Points:

  • Crude oil prices tumble serve as supply cuts struggles to trim supply glut
  • US supply count data, OPEC cabinet assembly might meant some-more trouble
  • Gold prices might find near-term support in French choosing uncertainty

Commodities done small advance over a past trade day. Crude oil prices continued to tumble yet movement noticeably slowed from a previous day’s breakneck selloff. Whispers of rough agreement on fluctuating a OPEC-led supply cut understanding unsuccessful to stir after Saudi Arabia Energy Minister Khalid Al-Falih pronounced a intrigue unsuccessful to strech a register rebate goal, during slightest so far.

From here, a assembly of a OPEC technical committee charged with monitoring a prolongation cut module and weekly Baker Hughes US supply count data are in focus. Taken together, they might assistance settle if a conglomeration appears to have a wherewithal to boost prices or if flourishing pitch supply will full equivalent a efforts. Yesterday’s cost movement seems to advise investors are increasingly prejudiced to a latter view.

Gold prices noted time even as softened risk ardour sent Treasury bond yields higher, bolstering a US Dollar along a way, while a 2017 Fed tightening opinion steepened for a second day. Indeed, a year-end rate pragmatic in Fed Funds futures rose by a many in a month. A militant conflict in Paris might have been understanding amid worries about a impact on a arriving French presidential election.

The initial turn of voting is set for this weekend and a 4 heading possibilities sojourn clustered nearby a 20 percent support symbol according to a latest polling data. That creates for scarcely towering uncertainty, quite with eurosceptics accounting for half of a field. This might conduct off sellers by a finish of a trade week, yet anticipating self-assurance for an upside pull might be challenging.

What will expostulate wanton oil and bullion cost trends by mid-year? See a forecasts to find out!

GOLD TECHNICAL ANALYSISGold prices are digesting waste after recoiling from insurgency nearby a $1300/oz figure, as expected. A mangle next trend line support during 1272.82 on a daily shutting basement would symbol a near-term trend annulment and primarily aim a 14.6% Fibonacci enlargement during 1258.62. Critical insurgency stays in a 1288.91-1308.00 area (trend line, Apr 17 high, former support).

Crude Oil Prices Extend Drop as OPEC Struggles with Reducing Glut

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices narrowly edged next support during 50.71, a 38.2% Fibonacci expansion, warning that serve debility might be ahead. From here, a daily tighten next a 50% turn during 49.78 exposes a 48.55-85 area (trend line, 61.8% Fib). Alternatively, a pierce behind above 50.71 opens a doorway for a retest of a 23.6% enlargement during 51.87.

Crude Oil Prices Extend Drop as OPEC Struggles with Reducing Glut

Chart combined regulating TradingView

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To accept Ilya’s research directly around email, greatfully SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak

About author