Crude oil price jumps after bullish OPEC report
The price of crude oil jumped today after OPEC released its monthly report. The report was a bit optimistic for the oil market because it said that even with the forecasted slow down in the global economy, demand was still increasing. This is also supported by the reduction in supply by OPEC members. The report comes at a time when investors are worried about the impact of the slowdown in the global economy and the increasing supply from the United States. Last week, data from Baker Hughes showed that inventories had risen by 7.
Global stocks rose today as investors became optimistic over the trade talks between the United States and China. On Thursday and Friday, Robert Lighthizer and Steve Mnuchin will meet with China’s Liu He in Beijing where they will continue with negotiations. Yesterday, Trump said that he was looking forward to meeting with Xi Jinping. If this meeting happens, it will likely lead to a deal between the two countries. Investors are also hopeful that another government shutdown will not happen this week after a deal between the democrats and republicans. However, there is a likelihood that this deal will be rejected by the White House because the funds allocated for the wall are very little.
The sterling declined today as investors waited for a statement from Theresa May. In a prepared statement, the premier is expected to tell the members of parliament that they all ‘need to hold their nerves’. The goal of her speech is to plead with the members to give her more time to change the Brexit deal she negotiated. Labor MPs on the other hand believe that she is running down the clock to March 29 to force them to vote for her deal. In Brussels, officials have asked the premier to table her plan. They accuse her of not having a concrete plan on how to proceed.
After initially falling, the EUR/USD pair rose to an intraday high of 1.1300. The pair had initially reached an intraday low of 1.1257. On the hourly chart, the 14-day and 28-day EMA appear to be crossing over, which is a sign that a new upward trend could be starting. This could be the case because yesterday, the pair crossed an important support of 1.1290. If the pair manages to go up, the next resistance level could be the 23.6% Fibonacci Retracement level of 1.1320.
Yesterday, the XTI/USD pair reached a low of 51.50. This was slightly higher than the important support of 51.40. Today, the pair rose sharply after the report released by OPEC. It reached an intraday high of 54.15. On the hourly chart, the pair has been a bit volatile as evidenced by the Average True Range indicator shown below. Today’s high was almost the 61.8% Fibonacci Retracement level. This is an indication that the pair could hit a pause as traders wait for inventory data from the United States. API will release its data overnight while EIA will release its data tomorrow.
After initially declining, the GBP/USD pair pared some of those losses as traders waited for Theresa May’s speech to parliament. The pair is now trading at 1.2875, which is higher than the day’s low of 1.2830. This price is slightly below the 28-day and 14-day EMA, while the RSI is moving from the oversold level. The pair will likely resume the downward trend because of the increasing risks and the deteriorating economy in the UK.