New oil bull market kicks off; OPEC+ triggers rush into energies
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Skilling Writers Team
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Market Talk
OPEC+ surprises oil traders with 1.1 million barrels a day production cut
Production cuts starting from next month (May 2023) Crude Oil Market Reaction:
- Crude prices +5% in front of EU trading session (Brent / WTI)
- Brent price breaks above key 50 day and 100 day moving averages (bullish); eyes on the $88.30s (January 23, 2023 highs)
- WTI bull cycle looks likely to continue after price cleared above key resistance near the $78.60s, opening up prospects for a test of the $83 round number (January 23, 2023 highs)
Energies percentage moves
Crude prices recovered during the last three months with price support coming from:
- Speculations that the global economy could still avoid a serious recession
- Pipeline shutdowns across the Kurdish lines
- Last night (Sunday) OPEC+ surprise production cut announcement
Natural gas price hammered during the last 3 months seems to be weather driven:
- Europe has had a mild winter
- New supply channels opened
- Increased production from the US
| Product | 3 month % change | Year to Date % change |
|---|---|---|
| Crude Oil Brent | 2.71% | -9.27% |
| Crude Oil WTI | 2.65% | -9.30% |
| Natural Gas | -41.48% | -47.19% |
Data as of April-03-2023 7:00 am UTC
Today’s Economic Events
US ISM Manufacturing Index remains below 50
- Is a leading economic indicator
- Readings above 50 indicate a growing manufacturing sector
- Readings below 50 indicate a shrinking manufacturing sector
| Time: UTC | Country/Region | Economic Indicator | Previous | Forecast | Actual |
|---|---|---|---|---|---|
| 1:30:00 AM | Australia | New Home Loans m/m | -2% | -3% | -1.20% |
| 2:00:00 PM | United States | Construction Spending m/m | -0.1 | 0 | - |
| 2:00:00 PM | United States | ISM Manufacturing Index | 47.7 | 47.5 | - |
| 2:00:00 PM | United States | ISM Man. New Orders | - | - | - |
| 2:00:00 PM | United States | ISM Man. Prices Index | - | - | - |
| 2:00:00 PM | United States | ISM Man. Employment Index | 49.1 | 50 | - |
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Tactical Trading Ideas & Commentary
WTI Crude Oil bullish cycle in play
Price has gapped higher which reinforces the bullish near term cycle (26-49 days), a break above the resistance near the $81.70s opens up the prospects for a further extension towards $83, while downside support is at $75.70, a failure to hold could put the $73.15-10s in sight.
Brent crude oil gapped higher after surprise OPEC+ cut
Brent price gapped sharply higher following the surprise OPEC+ production cut made during the overnight Asian session; current price above both its 50 day and 100 day moving averages (bullish) placing the prospects for a further price extension toward the $87.90s in sight; downside support zone seen between the $78.25 - $76.30s.
EUR/USD remains in a multi-month uptrend
Current price is in an uptrend (daily chart), this can be technically supported by the fact that current price is above its long term (50-100 days) upward-sloping trend line, as well as the higher tops and higher bottoms observed on price (dow pattern). Momentum analysis indicates upside momentum remains, downside supports at 1.0760 - 1.0630, and upside prospects for further price extension towards 1.1030 can not be ruled out.
Not investment advice. Past performance does not guarantee or predict future performance.
