NYMEX WTI Crude Oil Report and Forecast
UPDATE: 12:15 ( UTC+ 02:00) According to the Bloomberg : OPEC+ Meeting to Be Delayed on New Saudi, Russia Rift
Let us assume OPEC+ meeting will be held on Monday.
Could a deal raise prices? Yes it could, but probably not by much. An agreement is likely to be aimed at averting a further collapse in prices, rather than boosting them significantly.
Could a deal keep the prices above 35-40 $ / Barrel . Could a potential rise be sustainable? : NO
1. Russian oil producers cannot simply cut back production for technical reasons & have to pump below cash cost of production. Russia’s Urals grade is now trading at a discount of >$15/bbl to Brent.
2. What does Putin say? : a cut to global oil production of about 10m barrels a day is possible, but only if all major crude producers including the US join in the reduction pact.
3. The big physical buyers hedged the priceat 15-22 $/Barrel fort he next 6 months.
4. With or without a deal, a supply cut is needed. One way or another, oil supply from Saudi Arabia was about to fall because there is no demand for it.
5. With almost no global demand conditions, WTI Crude Oil future are unlikely to trade above 30 $ medium term.
6. The latest global corona reports are getting worse and worse. Therefore, global demand is unlikely to be increased in the near future.
Given the facts above :
If OPEC+ meeting can be held and a deal can be done:
We may see WTI Crude Oil price rising towards 32-35 $ / Barrel.
Before above-mentioned levels, we need to see a daily closing above 31.50 $
Our Medium-Term Targets: 26.50 , 25.00 and 22.00
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