USOil Steady After OPEC & IEA Reports
OPEC Report
On Monday, the Organization of the Petroleum Exporting Countries (OPEC) released its monthly Oil report, in which it maintained the world oil demand growth at 5.7 million barrels/day (mb/d) for 2021 and at 4.2 mb/d for 2022.
World oil demand for the first quarter of the next year was bumped up by 1.11 mb/d, to 99.13.
The organization acknowledged that oil prices declined in November, amid concerns regarding the emergence of the new Omicron, but noted that "the impact of the new Omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges" [1].
IEA Report
The International Energy Agency (IEA) on the other hand, seemed to strike a bit of a different tone, warning in today's monthly report that "a surge in new Covid cases is expected to slow the recovery in global oil demand, with air travel and jet fuel most affected".
Global oil demand is expected to rise by 3.3 mb/d in 2022, when it returns to pre-pandemic levels at 99.5 mb/d.
Furthermore, authors said that "Global oil production is poised to outpace demand from December, led by growth in the US and OPEC+ countries" [2].
USOIL Analysis
Black gold managed to post its first profitable week since mid-October, but the new one started with caution, creating a somewhat muddy technical landscape.
Investors appear cautious as they monitor the spread of the Omicron variant and await a data-deluge from the US and elsewhere through the week, as well as central bank activity. These events can potentially increase volatility and produce outsized moves.
Past Performance: Past Performance is not an indicator of future results.
USOIL is vulnerable to its 200Days EMA (above 69.00), but a dive that will threaten the mid-65.00s, does not seem easy at this stage.
On the other hand, the commodity finds support today and has the ability to push higher, although the lack of impetus may render the clear break of EMA200 (73.91-74.50) difficult.
Nikos Tzabouras
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 14 Dec 2021 https://www.opec.org/opec_web/en/publications/338.htm | |
| Retrieved 28 May 2023 https://www.iea.org/reports/oil-market-report-december-2021 |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.