Crude oil price rallies on hopes of a deal to slash supplies
US stocks rallied by more than three percent as markets received several positive catalysts. First, the number of new coronavirus cases in the US is slowing. On Tuesday, the cases increased by 8.1%, which was the third day of a consecutive slowdown. Second, the market reacted to news that Bernie Sanders was abandoning his presidential race. This leaves Joe Biden, who is viewed as a moderate to compete with Trump. Third, there is hope that OPEC+ members will reach an agreement in the scheduled meeting today. Fourth, the Fed minutes show that members were comfortable leaving rates at the current level for longer. Finally, there are hopes that a new stimulus package worth more than $1 trillion could be on the way.
The price of crude oil rose as the market pegged their hope on the upcoming OPEC+ meeting. There are hopes that the attendees will make concessions and help reduce current supplies. In theory, this would help stabilize prices in the near term. Still, with demand being at historic lows, there is a possibility that prices will remain lower for longer. Just yesterday, data from EIA showed that oil inventories had surged by more than 15 million barrels. This was higher than the expected increase of 9 million and higher than last week’s 13 million barrels. Cushing crude inventories rose by more than 6 million barrels.
Looking ahead, it will be a relatively busy day for the markets. The most important news will be from the OPEC+ meeting. Another important meeting will be from Europe, where Eurogroup ministers will be attempting to reach a deal on the coronavirus financing. We will receive the GDP, industrial production, and manufacturing production data from the UK. Germany will release its import and export data while the ECB will release its minutes for the previous meeting. From the US, we will receive the inflation and initial jobless claims data for March while from Canada, we will receive the March employment data.
The EUR/USD pair was little changed after the Fed released the FOMC minutes. The pair is trading at 1.0855, which is slightly below this week’s high of 1.0926. On the thirty-minutes chart, this price is along the lower line of the symmetrical triangle that is shown in yellow below. The average true range, which is a measure of volatility has fallen while the price has consolidated along the 14-day and 28-day EMA. The pair may make a significant breakout in the near term.
The GBP/USD pair wobbled during the American and Asian sessions. The pair is trading at 1.2390, which is slightly below yesterday’s high of 1.2420 and the low of 1.2368. On the hourly chart, the pair formed a double top yesterday and is forming an ascending triangle pattern. The price is also slightly above the 14-day and 28-day exponential moving averages. The pair may drop to test the important support of 1.2350.
The XBR/USD pair rose after the EIA released the inventory data for the previous week. The pair is trading at 1.3475, which is an important resistance level. The price is above the important support level of 32.55 as shown below. The price is above the 14-day and 28-day exponential moving averages while the RSI has been rising. The pair could have a significant breakout later today. The direction will depend on what the members agree.