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No rebound in oil price expected in the nearest future

FXStreet (Łódź) - Independent Analyst Malcolm Graham-Wood believes that unless China's oil demand remains strong and Opec discipline is restored, oil price will continue falling.

Key quotes

"Almost all the news is unremittingly bearish and international markets are falling, the Dow is perched right on the support level and the 200 day moving average."

"News from the Middle East provides further dismay, the Saudis have apparently said that markets should ‘get used to lower prices’ whilst Iran and Iraq are cutting prices to buyers for November crude. In addition the icing on the cake was provided by the Kuwaiti oil Minister saying that Opec was ‘unlikely’ to cut output. Opec itself has said that the cartel’s output in September was up 402/- b/d at 30.47m b/d not as high as recent surveys but still too much for markets at the moment."

"One glimmer of hope came from China where the September and 3Q trade stats beat market expectations. September exports were +15.3% (f/c 11.8%) and imports were up 7.1% (f/c down 2.7%), in oil, imports were up 9.5% m/m leaving a trade surplus of $31bn."

"As I said on Friday, although the oil price has continued to fall, at the moment I feel that the risk remains on the downside at least in the very short term."

"With six weeks to go until the Opec meeting most of the players are lining up but not showing any signs of the discipline that would be needed to arrest the decline, conspiracy theories abound about pricing out the US or ruining the Russian economy generally best ignored."

"A combination of Opec discipline and Chinese buying for strategic stocks is the best chance of getting anywhere near $100…"

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