Further to a previous article, both UKOil and USOil have charted a higher trough followed by a higher peak, putting the CFDs into uptrend. UKOil is now trading over $90 a barrel and USOil at $87.20 per barrel. Moreover, their stochastics are trading in their respective upper quintiles (red rectangles). This suggests that there is a strong underlying momentum that is supporting oil prices.
There were significant announcements which pushed oil prices higher. Firstly, Saudi Arabia today confirmed that it is extending its 1m bpd crude oil production cut until the end of the year. This according to the Saudi Press Agency.
The decrease in Saudi Arabia's crude oil production is expected to bring it close to 9 million barrels per day during Q4, with monthly re-evaluations.
In July, Riyadh initially implemented a reduction of 1m bpd and has subsequently extended it monthly. This reduction complements the 1.66 million barrels per day reduction in voluntary crude oil output that some members of OPEC have committed to until the end of the year.
In addition, Russia has also extended its 300K cut in exports for September until the end of 2023. It, too, will review monthly.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.