Home Forex Crude Oil Price Rallies as Traders Mull Sizeable OPEC+ Cuts This Week

Crude Oil Price Rallies as Traders Mull Sizeable OPEC+ Cuts This Week

by admin

Crude Oil, Chart, and Analysis

  • Talk that OPEC+ are considering a one million barrel per day cut, or more.
  • Oil turns higher despite global slowdown fears.

Recommended by Nick Cawley

Get Your Free Oil Forecast

The price of oil is turning higher Monday as supply and demand dynamics look to be reset later in the week. The OPEC+ meeting, starting on Wednesday, may well see production cuts of one million barrels a day as the 13 members of OPEC and the 11 non-OPEC members battle to shore up the price of oil in the face of growing recession fears. The latest market talk is that a cut of 500k bpd would disappoint the market, and see the spot price turn lower, while chatter of a potential 1.5 million bpd cut is not seen as totally outlandish and would push the spot price sharply higher. OPEC+ is expected to hold a press conference after their meeting on October 5.

The price of oil has also been aided by a softer US dollar. The greenback, using the US dollar basket (DXY), has fallen around two figures since mid-last week, making oil cheaper for non-dollar buyers.

Trade Smarter – Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

For all market-moving data releases and events, see the DailyFX Economic Calendar.

The daily Brent chart shows the supportive triple-bottom just above $82.55/brl held last week, allowing Brent to push higher at the back end of last week and the start of this week. The overall picture though remains bearish with an unbroken series of lower highs and lower lows in place, while the spot price continues to trade below all three simple moving averages. The 20-day sma is very close, just above $89.00/brl, and price action around here may well set the tone for the short-term. A break above here would bring a cluster of old highs on either side of $92.00/brl into play, while rejection would see $86.50/brl back into play.

Brent Oil Price Chart – October 3, 2022


Retail trader data show 69.14% of US crude oil traders are net-long with the ratio of traders long to short at 2.24 to 1.The number of traders net-long is 2.33% higher than yesterday and 17.41% lower from last week, while the number of traders net-short is 3.60% higher than yesterday and 44.72% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggestsOil– US Crude prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Oil – US Crude price trend may soon reverse higher despite the fact traders remain net-long.

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily 2% 12% 5%
Weekly -19% 65% -3%

What is your view on Oil – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

Source link

related posts