Karachi, January 02, 2019 (PPI-OT): Crude Oil
The WTI Crude Oil market initially tried to rally during the trading session on New Year’s Eve but gave back most of the gains to turn around and form a rather weak looking candle stick. Because of this, the market could roll over yet again, perhaps reaching towards the lows. However, the crude oil markets have been so negative that the buyers are going to struggle to continue to go higher. The $50 level above is massive resistance, as it was previous support. The 50 day EMA is turning lower, yet again. Ultimately, selling rallies continues to be the best way to go. Brent markets also gave back gains once it reached towards the $55 level, and if stay below the downtrend line, the market should continue to go much lower, perhaps down to the $50 handle. The $60 level above is also resistance, so given enough time is looking for signs of exhaustion that can take advantage of.
Oil markets reversed early gains today to fall on the back of surging U.S crude production and concerns of an economic slowdown in 2019
U.S crude output was last reported at a record 11.7 million bpd in late December 2018
In physical oil markets, Dubai crude averaged $57.318 a barrel for December, the lowest since October 2017
OPEC is committed to cut output by 3%, while independent producers will cut 2%
Oil inventories will starting falling by the end of the first quarter in 2019l
Oil markets dropped by around 1 percent in 2019’s first trading today, pulled down by surging U.S output and concerns about an economic slowdown in 2019 as factory activity in China, the world’s biggest oil importer.
International Brent crude futures for March were at $53.27 per barrel, down 53 cents, or 1 percent, from their final close of 2018. West Texas Intermediate futures were at $45.01 per barrel, down 40 cents, or 0.9 percent.
Investors said futures prices fell on expectations of oversupply amid surging U.S production and concerns about a global economic slowdown. It is most likely past the peak of this long economic uptrend.
Oil prices ended 2018 lower for the first time since 2015, after a desultory fourth quarter that saw buyers flee the market over growing worries about too much supply and mixed signals related to renewed U.S sanctions on Iran.
Oil prices registered their first yearly decline in three years on fears of a slowing global economy and concerns of an ongoing supply glut. For the year, WTI futures slumped nearly 25 percent, while Brent tumbled nearly 20 percent.
Oil prices are expected to trade below $70 per barrel in 2019 as surplus production, much of it from the US, and slowing economic growth undermine efforts led by the OPEC to cut supply and prop up prices.
U.S crude output rose to an all-time high of 11.537 million barrels per day in October, the EIA said on Monday. That makes the U.S the world’s biggest oil producer ahead of Russia and Saudi Arabia.