Supply: IG Charts CRUDE OIL FUNDAMENTAL HIGHLIGHTS:Crude Oil Upside Stalling OPEC AssemblyUS-China Compliance Evaluation to Set
Supply: IG Charts
CRUDE OIL FUNDAMENTAL HIGHLIGHTS:
- Crude Oil Upside Stalling
- OPEC Assembly
- US-China Compliance Evaluation to Set the Tone Early
| Change in | Longs | Shorts | OI |
| Every day | 13% | -12% | 1% |
| Weekly | -4% | 5% | 0% |
Crude Oil Upside Stalling
Modest features for Brent crude futures with a 1% enhance (at time of writing). Nonetheless, with virus issues remaining within the backdrop, upside has begun to stall for oil costs because the outlook begins to look much less bullish. This had been emphasised by OPEC’s latest forecast, through which they downgraded their world oil demand for this 12 months by 400kbpd and 500kbpd for 2021. This additionally comes at a time the place OPEC wish to proceed tapering its manufacturing cuts.
OPEC Assembly
Subsequent week OPEC+ JMMC assembly will happen on August 19th. Nonetheless, as is usually the case with OPEC conferences, sources will doubtless catch wind of the newest plans concerning the oil market previous to the assembly. In flip, headline threat is prone to be barely elevated for oil costs within the coming week.
As a reminder, on the prior assembly, OPEC+ had agreed to taper its document manufacturing cuts of 9.7mbpd to 7.7mbpd from the start of August, which had been line with the unique plan. That stated, oil costs have remained in a decent vary with COVID circumstances throughout America and the re-emergence in Europe casting doubts over gasoline consumption. Though, with oil costs considerably broadly stead, it’s anticipated that OPEC+ will take a “wait and see” stance and thus we anticipate little in manner of great modifications to present coverage.
US-China Compliance Evaluation to Set the Tone Early
Except for OPEC, the tone for the oil market is prone to be set early within the week on the fallout from the US-China compliance evaluation of the part 1 deal (scheduled Aug 15th). In latest weeks, President Trump has acknowledged that the commerce deal means much less to him, as such, focus might flip in direction of the rhetoric on a number of points round cybersecurity (Huawei, TikTok) in addition to geopolitical issues (particularly Hong Kong Safety Legal guidelines). That stated, supply studies from the South China Morning Submit sign that little is anticipated by way of a breakthrough, as such, threat urge for food might battle to start the week, retaining oil upside contained.
CRUDE OIL CHART: DAILY TIME FRAME
Supply: IG