Oil Prices Pullback Halted Ahead of Monthly Highs With OPEC+ On The Side

Oil-Price-Rebound-Stalls-Ahead-of-Monthly-High-with-OPEC-on-Sidelines

OIL KEY POINTS

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The oil prices trades in the narrow range with the rebound from $36.13, September low seems to have stopped ahead of $43.43, the monthly high and indications of the protracted recovery might drag the prices of energy with OPEC (Organization of the Petroleum Exporting Countries) seems to be shifting sideways after the “longest and largest production adjustments in the oil sectors history.”

NEUTRAL TECHNICAL FORECAST FOR OIL

The prices of oil might continue consolidating as we head into the last part of September as OPEC unwinds the production cuts as they respond to the coronavirus and the latest remarks from Mohammad Sanusi Barkindo, the Secretary-General suggests that the group isn’t in any rush to continue reducing supply with the measures considered by the Declaration of Cooperation (DoC).

OPEC and its peers might start striking the same tone with the subsequent (JMMC) Joint Ministerial Monitoring Committee meeting scheduled for 19th October as the officials welcome the optimistic performance as conformity for taking part in OPEC and non-OPEC nations of the DoC that were recorded at about 102% last month, but the signs for protracted recovery might nudge the group to start scaling back on production as the participating nations must be willing to take more necessary measures that are required as AUD/USD At Key Support, Trump Popularity On The Rise Despite Virus Spike.

Technically speaking, OPEC’s latest MOMR (monthly oil market report) shows another downtrend revision in the global demand outlook, with the forecast of 2020 with comparison to the August monthly oil market report.

These updates have also shown that for the year 2021, the global oil demand outlook has also been revised lower by 0.4 mb/d month/month. The report further states that with the increase of the coronavirus related developments, many uncertainties and including huge debt levels, ongoing geopolitical risks, inflation, trade-related challenges, with the possibility of the hard Brexit.

It’s still yet to be seen whether OPEC and its peers will take all the extra steps in the year 2020 in order to further support the prices of oil with the US Crude inventories contracting less than anticipated, with the stockpiles narrowing.

However, the new figures coming from the EIA (Energy Information Administration) showed field crude oil production, narrowing from 10,900K b/d to 10,700K b/d in the week that ended 11th September. Also, any further slowdown in the United States output might keep OPEC and its allies on the sides with production in the US remaining at its lowest levels from 2018.

That said, future updates from the United States might sway a change in oil prices ahead of the scheduled JMMC meeting amidst the slowdown in the production of crude oil.

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