Oil prices consolidate, eying Thursday’s OPEC meeting
Oil prices consolidate, eying Thursday’s OPEC meeting

Oil prices consolidate, eying Thursday’s OPEC meeting

 
An asset that once traded below zero, Oil was one of the most affected instruments during the initial stages of the Covid-19 pandemic. Nowadays, it has recovered to much healthier levels as global demand begins to bounce back up and as the world continues its journey towards eliminating the virus.
Overextended prices are part of the story
After reaching close to the psychologically significant 70.00 level, market players began unwinding positions as the technical setup hinted at a broad profit-taking episode. As certain signs began to emerge such as sell-focused price action or technically significant targets, traders will quickly look to secure profits and close positions while waiting for new bargains in the near term.
Despite the repositioning, the trend remains intact as Oil bounced from the 30s late last year to current levels in the 60s, a gain of almost 100% and a healthy environment for more, given the improved global demand and the technical outlook.
Short and long term fundamentals weigh in
Beyond the technical drop, fundamentals played a role as renewed Covid concerns across Europe quickly overshadowed a blocked Suez Canal. As Vaccine controversy remains high and new lockdowns being announced, the continent is struggling with keeping the pandemic in check. This gave traders more reasons not to position themselves towards further upside just yet while locking in profits for now.
Furthermore, supply curbs by OPEC are likely to continue given the ongoing demand worries plaguing the world. Yes, Oil prices did rebound from pre-Covid levels but there is a certain lack of consistency in demand driven by uncertainty which kept OPEC proactive about production. This is likely to keep prices in check for now until the next meeting set in early April.
What’s next for Oil?
While the world is heading towards more vaccines being administered, new lockdowns such as the ones renewing in Europe could very much lower demand while OPEC’s view on supply creation could also change unexpectedly. Nonetheless, and unless seismic fundamental shifts take place, both sides of the analysis spectrum are relatively in sync for more gains, albeit likely limited in nature given the relatively overdone move that manifested itself already.
The content present in this article reflects the opinions and views of the author and does not necessarily reflect the position of CFI. The material published on this blog is provided for informational purposes only and should not be considered as investment advice. The Company is not responsible for the decisions and choices of the investor who has full and free will to make decisions that they see appropriate upon the investor’s sole discretion.
Credit Financier Invest (Mauritius) Ltd is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
Credit Financier Invest (Mauritius) Ltd has regulated subsidiaries in
London • Larnaca • Beirut • Amman • Dubai • Port Louis
Credit Financier Invest

Important Disclaimer:


We would like to remind that while we endeavour to provide best possible services, CFI provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.


Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest (Mauritius) Ltd provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.

niss
forme
The Best Online Financial Trading Services, Middle East, 2020
Entrepreneur Magazine

Please publish modules in offcanvas position.