4 reasons why the oil is FOREX tanks

4 reasons why the oil is FOREX tanks

WTI plummeted more than 2% on Wednesday, as the outlook for oil is increasingly bleak. Here are the main factors

that impact the price of oil:

1. The focus has shifted from the supply side to the demand side. While OPEC cuts and sanctions in Venezuela and Iran pushed up oil prices earlier this year, more recently the demand side of the equation is dominating. As worries about a global slowdown mount fears about a drop in global oil demand rise. The Energy Information Association of the US UU (EIA, for its acronym in English) cuts its forecast for the global oil demand of 2019 in this narrative and the price of oil will fall.

2. EE. UU – Chinese commercial dispute: with the commercial dispute in the course between EE. UU And China, the biggest words consumers of oil, show no signs of resolution. The impact of increased trade tensions in the two economies is becoming more evident, as economic data continue to surprise the downside.

3. Increase in stocks: an unexpected increase in US reserves. UU It’s keeping the oil under pressure. US crude inventories for the week ended June 7 rose by 4.9 million barrels against expectations of a 481,000 barrel decline, according to data on Tuesday. Investors are increasingly concerned about the increase in stocks amid the slowdown of a slower outlook for demand.

4. Will OPEC continue production cuts? OPEC plus Russia has limited its production since the beginning of the year to support falling prices. The merchants will direct their attention to the next OPEC meeting, which is expected for June 25, where they will discuss the continuation of the current cuts. Given Iran’s volatile production and the increasingly uncertain economic outlook, the general expectation is that OPEC will agree to keep the cuts in place. This would support oil prices giving them a boost in the third quarter.

WTI levels to follow: the
Oil went down for the third consecutive session, trading below its 50, 100 and 200 small. A clear bearish trend. Immediate support can be seen at $ 51.15, before $ 51.50 and the key level of $ 50. On the upside, a break of $ 52.60 could open the door at $ 53.40.

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