FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1730
BTC/USD
47 499.18
GBP/USD
1.3751
USD/JPY
109.9450
USD/CHF
0.9316
USD/CAD
1.2765
EUR/JPY
128.9676

Oil seeking out a new bottom


24 February 2020

Oil opened the week with a more than 3% drop near $56 per barrel of Brent and below $52 per WTI. The oil “mini-reversal” occurred along with the stock markets and echoed their dynamics, confirming that economic growth sentiment is currently the determining factor in the oil price.

At the end of last week, the markets turned back to decline amid reports that monetary stimulus alone is challenging to overcome the coronavirus impact.

Worse yet, more and more news showed that coronavirus is spreading to other countries. Investors now closely monitor the situation in S. Korea, Iran and Italy, which risk becoming new virus hotspots.

Against this backdrop, demand for jet fuel is falling catastrophically, sending prices down 40% so far this year.

Brent lost 24% of its peak levels in the first days of the year, after which it reversed to growth following the stock markets in early February. However, this rebound seems to be over.

Market participants are making an in-depth assessment of the scale of decline in commodities consumption in the coming months. The focus is now on the long-closed factories in province Hubei, a sharp drop in road traffic in China and thousands of cancelled flights around the world, not to mention a sharp drop in passenger traffic worldwide. As was the situation after September 11, 2001, a large proportion of people are afraid to fly.

Friday’s American data put oil on the fire. US Services PMI data collapsed from 53.4 to 49.4, indicating an activity slump. In the US economy, the service sector accounts for up to 80% of the GDP, so the decline risks severely damaging the GDP growth figures.

For oil, it might mean a new reversal to the decline after a short bounce. Potentially, the nearest targets for oil decline could be the low levels of early February near $53 per barrel of Brent and $49.50 per barrel of WTI. However, the continued impact of coronavirus on the economy may well send Brent in search of a deeper bottom, with lows near the end of 2018 ($50/bbl Brent) or even lows of 2017 at $44/bbl.

#source

Related

US Retail sales and other data has supported Dollar
US Retail sales and other data has supported Dollar

The US Retail sales notably exceeded expectations, adding 0.7% in August vs an expected 0.7% decline. The increase to August last year is an impressive 14.9%...

17 Sep 2021

Geopolitics Fire Up Up and Cryptos Are Booming
Geopolitics Fire Up Up and Cryptos Are Booming

Futures in the United States and Europe are trading lower today as investors are worried about the new security agreement between the U.S., the U.K. and Australia...

16 Sep 2021

UK inflation surges, stocks struggle
UK inflation surges, stocks struggle

European markets flat at the open this morning as UK inflation surged to a record high in August and Chinese economic data was soft. China’s retail sales fell to...

15 Sep 2021

Gold is anxiously waiting for the US inflation data
Gold is anxiously waiting for the US inflation data

Gold, hovering around $1790 since last Thursday, might take an even harder hit. The bears are waiting for a good signal to launch an attack. It is now holding it below significant levels...

14 Sep 2021

Here Is Why Stock Futures Are Trading Lower
Here Is Why Stock Futures Are Trading Lower

Despite a week of doom and gloom in the stock markets, futures in the United States are still trading lower. Since February, the S&P 500 has been on its longest...

13 Sep 2021

Fintech - too big to be?
Fintech - too big to be?

Two of the world’s largest economies are in sync with pressure on their fintech giants. Access to user data and the growth of ecosystems have effectively...

13 Sep 2021


Editors' Picks

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.