OIL Special, on Doha Meeting: Key Oil producing countries are meeting at Doha on 17 April to discuss production freeze to reduce the extent of global oil oversupply. This follows from 16 February Doha meeting between Qatar, Saudi Arabia, Russia and Venezuela setting up a proposal to freeze oil output. The 16 February meeting acted as a catalyst that shifted the sentiment of the oil market as Crude Oil rallied to above $40 from $26 low. The 17 April meeting will incorporate further producers, representing around half of the world’s crude production, including the originals Qatar, Saudi Arabia, Russia, Venezuela and in addition Algeria, Angola, Azerbaijan, Colombia, Ecuador, Indonesia, Iraq, Kuwait, Nigeria, Oman and the United Arab Emirates. Notable exception are Argentina, Brazil, Libya and Norway. United States and Canada, source of shale oil boom, will not be attending. Iran is undecided and will key to an agreement as it plans to accelerate production with its sanctioned lifted earlier in January.
Whether production freeze agreement will have lasting effect is questionable. Oil market remains in oversupply and inventory high. Reduction in U.S. oil production since peaking late last year is being captured by Iran’s boosting their production to more than 600,000 barrels a day. A lift of oil price will also result in U.S. shale producers returning their rigs on. Global demand remains uncertain with China’s slowing growth and emerging markets including Latin America in shaky ground.
- Stocks: There is a continuation in the positive sentiment in stock markets, as indices are boosted from better than expected China trade data but also some banks in US beating expectations in their earnings reports. Positive sentiment was also boosted form the fact that Singapore unexpectedly eased their monetary policy overnight (Something that is always welcomed by stock markets) and the weaker JPY which led Nikkei to another solid day with 3.2% gains. Elsewhere, Australia’s S&P/ASX200 rose 1.1%, Korea’s Kospi 1.55% and Hong Kong’s Hang Seng Index rose 0.77%. In the US Dow Jones rose 1.06% hitting its highest level since November.
- Currencies: Although not the most popular pair among our traders, USDJPY is responsible for most market movement these days so we have to give it some respect. USDJPY was last trading 109.37 after touching as low as 107 this week. A strong Yen pressures profits of Japanese companies by making their exports more expensive. EURUSD fell to 1.1254, its lowest since March 29, before slightly bouncing up. GBPUSD is also under renewed pressure after it failed at 1.4350 resistance. The pair is currently trading at fresh lows just above 1.4120.
Oil and GOLD: Crude oil prices had an impressive 8 day run, however prices retreated from their highs at $42.38 and headed lower suppressed by worries of an expanding supply glut after OPEC warned that demand growth could slow. Yesterday, OIL surged to the highest levels in 2016 following the news that Russia and Saudi will agree on an output freeze. GOLD also retreated after a 4 day rally, as investors turned into stock markets after better economic news out of China.
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Trade Brent Oil (ICE) Intraday: the bias remains bullish.
Pivot: 43.00
Our preference: long positions above 43.00 with targets @ 45.00 & 46.00 in extension.
Alternative scenario: below 43.00 look for further downside with 42.30 & 41.36 as targets.
Comment: a support base at 43.00 has formed and has allowed for a temporary stabilisation.
Supports and resistances:
46.75
46.00
45.00
44.17 Last
43.00
42.30
41.36
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Trade Crude Oil (WTI) Intraday: the bias remains bullish.
Pivot: 40.30
Our preference: long positions above 40.30 with targets @ 42.50 & 43.20 in extension.
Alternative scenario: below 40.30 look for further downside with 39.20 & 38.25 as targets.
Comment: a support base at 40.30 has formed and has allowed for a temporary stabilisation.
Supports and resistances:
44.20
43.20
42.50
41.76 Last
40.30
39.20
38.25
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Trade AUD/USD Intraday: target 0.7720. |
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Pivot: 0.7615
Our preference: long positions above 0.7615 with targets @ 0.7720 & 0.7755 in extension.
Alternative scenario: below 0.7615 look for further downside with 0.7580 & 0.7525 as targets.
Comment: the RSI lacks downward momentum.
Supports and resistances:
0.7805
0.7755
0.7720
0.7694 Last
0.7615
0.7580
0.7525
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Trade S&P 500 (CME) ST: caution.
Pivot: 2020.00
Our preference: long positions above 2020.00 with targets @ 2085.00 & 2110.00 in extension.
Alternative scenario: below 2020.00 look for further downside with 1976.00 & 1940.00 as targets.
Comment: investors have to remain cautious since these levels may trigger profit taking. The 20-day simple moving average is trending higher but the upward potential is limited by the consolidation channel’s upper boundary.
Supports and resistances:
2126.00 *
2110.00 **
2085.00 ***
2077.75 Last
2020.00 **
1976.00 **
1940.00 **
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Trade Gas Oil (May 16 – ICE) ST: the upside prevails as long as 347.5 is support |
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347.5 is our pivot point.
Our preference: the upside prevails as long as 347.5 is support.
Alternative scenario: the downside breakout of 347.5 would call for 316.5 and 298.
Comment: the RSI is above 50. The MACD is positive and above its signal line. The configuration is positive. The price is trading above both its 20 and 50 day MA (respectively at 357.14 and 339.77).
Supports and resistances:
467.75 **
449 *
430.5 **
412
372.25 last
359.5
347.5 **
316.5 *
298 **
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