Oil at $ 20-30 per barrel is not profitable to any manufacturer and politicians
The FTSE tested yearly lows. Monday, November 26, in the commodities market is developing a technical rebound, but it makes little difference in the global picture of trading in the “black gold”. The position of the sellers here are now clearly stronger buyers.
The second week the sale of oil has provoked the same set of fundamental factors – from increased ninth consecutive week of oil reserves in the United States to “inhibition” of the world economy, while reducing the demand for raw materials. In addition, prices under pressure from the growth of oil production in the United States and Russia, as well as plans to increase the daily pumping of raw materials to the controversial Kirkuk oilfield. A number of factors supporting the buyers in the form of increased purchase of oil by India and Saudi Arabia’s plans to cut production the market is not helping.
In addition, the U.S. dollar constantly reminds himself, and during the periods of consolidation in the global currency market oil feels additional pressure.
Now it should say that the oil at 20-30 USD per barrel is not profitable to any manufacturer and politicians. For raw materials manufactured in Saudi Arabia, the profitability threshold is around 40 USD, for Russia, Kazakhstan and other more than 60 USD. Sharp fluctuations in prices for “black gold” are associated with a high degree of oversaturation of the market and growth prospects of this imbalance. It is obvious that the rate of improvement in demand this year overestimated.
Now it is important that demand expectations for the year 2019 turned out to be adequate in accordance with them major oil producers will begin to adjust their production parameters. Nobody wants to pump oil, then to store the excess on tankers and in storage.
The current situation in the oil market Brent requires a comprehensive analysis and evaluation.
On the daily chart you can see that after the divergence and overcoming previous support line of the rising channel, the quotes decreased to the support projection of the channel and are approaching the level of 50.0% (57,00) on a scale Fibonacci relative to previous trend growth. The following important reduce could be the level of 61.8% (50,00), which is also psychologically important support. The resistance is around 72,90.
On 4-hour chart of Brent see that the downtrend is part of a stable downtrend channel. It is worth noting the formation of convergence on the MACD, which may indicate the imminent correction.
The main signal the start of the pullback may be the breakdown of local resistance level – 62,73. The goal of the roll back then it will be the total resistance at 72,90.
The material is provided,