Oil Bears take Control

This prevailing macro had quenched oil bulls resolve in breaking above $45/Barrel in the mid-term as the number of caseloads surged past 40 million.

Both major crude oil benchmarks, however remained above $40/Barrel but selling pressure of late, have intensified around their critical support levels, meaning the bears now hold the ace in testing below such levels as global energy demand falter in the near term.

Although oil traders are not having sleepless nights on the bias that crude oil prices are relatively stable after that the sharp plunge seen at the start of September. Brent crude has been able to recover to the $42/barrel price level but low volatility and choppy price range sighted in its most recent price action is sending warning signals to oil traders that oil bulls are momentarily exhausted.

In spite of such dampening fundamental, oil traders are highly skeptical that a repeat of a March and April decline will come to play amid renewed lockdown modes sighted in emerged markets like France, Germany and United Kingdom.

The global demand picture for crude oil still remains fragile on the basis that the restriction of human mobility will continually weigh on crude oil demand/supply rebalancing, amid major oil players that include the Saudis and Russians not giving a clear picture if they would reconsider the planned early next year output boost.

That said, oil traders will also focus on the outcome for the long-awaited US stimulus deal in the near term as such positivity from that deal could awaken oil bulls and push Brent crude prices above $43/barrel.

For a look at all of today’s economic events, check out our economic calendar.

China’s GDP Data Brings Back Oil Bears

Both oil benchmarks remained above the $40/Barrel price level.

Brent oil future prices were down 0.37% to trade at $42.77 at the time of writing and West Texas Intermediate crude lost about 0.41% to trade at $40.95.

China reported a 4.9% growth in GDP Y/Y for Q3, smaller than the 5.2% growth earlier anticipated by economic analysts. Although other fundamentals like China’s current unemployment rate was 5.4%, down from the previous quarter’s rate of 5.6%. Industrial production grew 6.9% Y/Y and retail sales grew 3.3% Y/Y, showing a rebound in China’s economic activity amid COVID-19 negative disruption.

However oil traders had hoped for a complete robust economic data from China, a top oil importer, which would mean the world’s economy had a strong footing taking into consideration China’s role in global trade but, its GDP numbers kept oil traders reducing long bets momentarily.

Crude oil bulls still remain under pressure, not surprising to see the recent OPEC’s efforts in curtailing present oil production. OPEC+ is scheduled to hold an all-important meeting on the last day in November, on strategies in limiting crude oil production from January 2021.

The bears might continue to have the limelight, with the resurgence of Covid-19 disrupting major global economies, the restriction on human mobility now observed in Western European countries like France, Germany coupled with the ramping up of oil production in Libya, has weakened the odds for crude oil prices finishing above $45/Barrel in 2020.

Oil traders are certainly nervous about the fact that the trajectory on Covid-19 infections has skewed upwards thereby raising doubts on a pre-COVID-19 economic recovery anytime soon and dampening the prospects for oil demand growth globally.

In addition, as global demand for gasoline remains fragile, OPEC+ will continue to remain under pressure to intervene and support crude oil prices, as long as possible.

For a look at all of today’s economic events, check out our economic calendar.

High Odds for COVID -19 Vaccines Support Crude Oil

Major crude oil benchmarks that include Brent crude ended W/W slightly lower, losing 0.2% as oil traders worry the London based oil contract, might have its demand tightening on the macro stating COVID -19 caseloads is exploding at an alarming rate in major European countries like Germany and the United Kingdom.

However the popularly known U.S oil grade West Texas Intermediate ended W/W quite impressive has it gained 0.7%, as recent U.S oil stockpiles printed an uptick in oil demand, coupled with the bias, the Republicans would pass some form of stimulus deal in smoothening the World’s largest fragile economy on sentiments showing the U.S election is fast approaching.

On the parabolic, the black liquid hydrocarbon faces intense pressure near term, on the bias revealing oil bulls in recent weeks seem to suffer momentarily from exhaustion, anytime they approach their immediate key resistance price levels coupled with another major bias that reveals low chances of gasoline demand/supply levels taking shape to pre-COVID-19 era, on sentiments that major oil producers might not be able to sustain their commitments in keeping with current oil production cut due to their weak earnings and high budget deficits, as most depend on the black fossil for their economic development.

In spite of the prevailing macro surrounding energy demand, many experts don’t see crude prices to breaching below the $35 /barrel support level, as the world’s leading Pharmaceutical Company Pfizer announced that its COVID-19 vaccine product would be ready before the year runs out.

A duly registered COVID-19 vaccine readily available at such time could propel crude oil prices near $45/Barrel and most importantly restore the type of volatility seen in the pre-COVID-19 era.

That said, Brent crude prices are still showing an impressive amount of resolve around the $40/barrel price levels amid profit-taking seen at around $43-$43.20 price levels on cyclic fundamentals showing oil traders exposed by the high geopolitical uncertainty.

It’s critical not to forget oil traders are kind of focused more, in the near term on the likely winner of the U.S election, on the sentiments that President Trump re-election will be a nice macro for the black fossil market amid his dwindling odds for re-elections.

For a look at all of today’s economic events, check out our economic calendar.

Gold prices stay above $1,900/ounce, COVID-19 Outbreak Ticks Up

Gold prices have remained relatively stable, as it traded above the $1,905/0unce level at the start of its last trading session for the week.

This yellow metal has picked up gains in the past few weeks cumulatively on the lingering U.S stimulus deal, awaited by global investors and the COVID-19 onslaughts emanating from emerged markets.

Gold bulls seem to have enough gas to at least stay on course, on the bias showing financial markets globally and human mobility will be affected by the resurgence of the Covid-19 outbreak, as the number of people infected with the deadly virus surpasses 38 million world-wide.

Adding woes to gold bears is another vital fundamental, revealing the upsurge in COVID-19 outbreak had now facilitated calls for strict restrictions on human mobility as Europe’s largest economy Germany, marked the record high daily cases of COVID-19.

It’s important to observe gold bulls, amid this uncertainty, have not had it easy, as the yellow metal prices gets whipsawed by the greenback’s rebound ,on growing sentiments showing global investors switch into the safe-haven currency, revealing why price movements have been stuttering in the precious metal market of late, especially when gold futures approach the 1,915/ounce price levels.

Looking at the monetary angle, gold’s price upsides look limited, taking into consideration traders seem to be in a state of confusion, as the world’s most powerful central bank of late sends mixed signals, such as the extent of the economic recovery period, inflation overshoot thereby revealing Richard Clarida, John C. Williams and, Jerome Powell who effectively control the popular known central bank are not the same page, howbeit partly responsible for gold’s ranging pattern in the mid-term, as traders look clueless on what direction to go.

On its recent price action, Gold prices are more likely to range around $1,900-$1,915/ounce in the coming days depending on short-term greenback moves.

For a look at all of today’s economic events, check out our economic calendar.

 

COVID-19 Snaps up Oil Traders Long Bias

The price plunge is coming on the bias that some oil traders are moving at a steady pace to preserve their capital in the world’s safe-haven currency, the U.S dollar, amid growing geopolitical uncertainty across the market spectrum.

The two major benchmarks for crude oil, Brent crude and West Texas Intermediate futures at the time this report was written lost about 0.6% howbeit remained above $40/barrel and their respective critical support levels.

As if on cue, Crude oil prices have been on a roller coaster in the past few days, as unstable stimulus discussions ongoing at the U.S capitol coupled with resurging COVID cases fast approaching 40 million, dented the oil bulls resolve in breaching above their ceiling price levels.

Major European countries are now looking to restart restrictions and lockdowns amid rising cases of COVID-19 related infections.

Not forgetting India, the world’s third consumer of oil, is on track to overtake the United States on the number of COVID-19 cases, dampening the energy left for the oil bulls to keep prices fairly stable at least for now, on the bias that India is bracing for more upside on the number of COVID-19 infections as it fast approaches its major holiday season.

With COVID-19 onslaughts firing up on all cylinders the magic bullet would be a readily available registered COVID-19 vaccine, though that doesn’t look likely with recent reports coming from many leading pharmaceutical companies.

Traders however will hope for a more realistic one, revealing the oil cartel’s group intent on extending its current quotas on crude oil production cuts into early 2021.

In conclusion, Crude oil price recovery remains very fragile, as reflected through disturbing macros that will most likely affect crude oil demand/supply rebalancing on the sentiments that Covid-19 caseloads exploding beyond prevailing rates look apparent in many major countries.

For a look at all of today’s economic events, check out our economic calendar.

Oil Traders on a Roller Coaster, COVID-19 Onslaughts Rages On

Recent data retrieved from Johns Hopkins University data showed the number of global cases reached 38 million.

At the time of writing both major crude oil benchmarks, which include Brent crude and West Texas Intermediate futures traded above $40/Barrel.

Still, crude oil prices remain under pressure, on the bias showing crude oil bears taking charge of Asia’s trading session as crude oil bulls seem to be on a pause as it approached the $43/Barrel critical resistance level. This mentioned price level has been difficult for oil bulls breaking higher for a few months now coupled with the major macro of crude oil’s low chances of demand/supply levels adjusting to pre-COVID-19 era.

Brent crude prices still show a significant amount of strength at the $40/barrel price level but profit-taking is observed around the $42.50-$43.20 price levels as oil traders seemed to be exposed by the aurora of high geopolitical uncertainty. That said it’s seems unlikely for Brent crude prices to breach below the $38.50/barrel level.

Also taking note of the recent report released by the International Energy Agency warning that it will take about three years for energy consumption to return to pre-crisis levels, will definitely add pressure on oil prices in the long term, meanings it’s very unlikely to see the price of crude at the price level of $60/Barrel in Q1, 2021.

The International Energy Agency also raised flags on fossils, on the growing effect of renewables, which of late has shown a significant amount of interests, among global investors considering the fact, that an emerging renewable company, Tesla has outshined almost all western listed energy companies of late, on the bias that it offers better prospects than fossil allied companies and the strong bias that the world is switching more to renewable.

For a look at all of today’s economic events, check out our economic calendar.

China’s Energy Data Bailout Oil Bulls

However the gains were capped as concerns about supply resumption in the Northern sea region, Libya, Gulf of Mexico weighed heavily on the bulls.

Both major oil benchmarks, which include Brent crude and West Texas Intermediate gained over 0.2% and were notable above their key support levels.

China, the world’s largest importer for fuel, brought in 11.8 million barrels per day of crude oil last month, showing an upside of 5.5% from 11.18 million barrels per day recorded in the month of August and 17.5% gain from 10.04 million barrels per day in September 2019.

The bulls seem to be rallying up on high hope that the U.S stimulus deal, will scale through, as the present administration, will not want to damage its dwindling chances of being reelected.

Also the International Energy Agency (IEA) in its recently released annual World Energy Outlook disclosed the introduction of a readily approved COVID-19 vaccine would help the fragile global economy reboot momentarily in 2021 thereby enhancing energy demand recovery optimally in 2023.

Although, as rising COVID-19 caseloads continue to make headlines, oil traders seem not to be so fussed about the global recovery hitting the brick wall on the basis that a complete lockdown mode as seen in Q2 are not an option for now while broader bias showing COVID-19 vaccines progress increasing rapidly, as helped soothe some traders nerves.

However in the near term, recent price action show, crude oil prices remain under pressure, as crude oil production restarts in major energy hubs, the bias is traders would be wary of taking excessive long bets, on the sentiments that the global economy hasn’t fired up yet, coupled with the fact that emerged nations are heading towards winter, known for having lower consumption for energy.

For a look at all of today’s economic events, check out our economic calendar.

Fear of Crude Oil Market being Saturated Lingers on

At the time of writing, Brent crude and West Texas Intermediate had lost about 1%, howbeit both oil contracts remained above $40/Barrel.

Both crude oil benchmarks have gained more than 9% gains in the previous week, recording their biggest weekly gain in the case for Brent crude since June.

With the expected return of exogenous supply and as short-term constraints begin to ease, it’s not surprising to see the black liquid hydrocarbon falling, as growing fears on strong bias that the crude oil market might be getting saturated lingers on.

Since oil production has begun in America’s major hub and recent reports say Libya’s Sahara field will be producing 40,000 barrels of oil per day before reaching its optimal capacity of almost 300,000 barrels in some days’ time, Oil traders are becoming wary that crude oil demand/supply rebalancing might not be feasible in the prevailing economic climate.

Also on the back of many oil traders’ mind is the exploding rate of COVID-19 cases globally, amid a high contested U.S election coming up in a few weeks’ time, as further blew the needed gas for crude oil to breakout from the price range between $38.50-$45/barrel in the near and mid-term.

Although OPEC+ should be given credit for supporting oil prices to this present level, what remains to be seen, is if the oil cartel will remain committed in the long term in reducing their oil output quota, amid pending budgetary deficits seen in economies, negatively affected by the disruption of the COVID-19 pandemic.

That said, some traders are holding on to their positions on the likely winner of the U.S election, as President Trump re-election will be good for crude oil bulls, though his odds for reelections seem to be dwindling like the ice-cream in the sun.

Finally a registered COVID-19 vaccine readily available in the mid-term could propel crude oil prices near $50/Barrel.

For a look at all of today’s economic events, check out our economic calendar.

Oil Prices Start Q4 up, Hurricane Delta Disrupts America’s Energy Hub

Oil bulls took control relatively as Hurricane Delta disrupted America’s energy hub, taking , validating with data further revealed crude oil production in the Gulf of Mexico plummeted by 1.69 million barrels or 92% of the energy hub’s daily output as a result of offshore oil platforms remaining closed after the dreadful storm tore through the region.

Crude oil traders are taking such squeeze in supplies bullish, as crude oil demand/supply rebalancing remains the key indicator, traders and oil players are taking into consideration in 2020, amid fragile demand as the COVID-19 virus onslaughts weigh its ugly head on the global economy.

That said, it becomes unsurprising to see crude oil prices still down about 36% in 2020.

OPEC+ including Russia is scheduled to meet on November 30-December 1, 2020 to know how it has fared on supporting the black viscous liquid hydrocarbon.

Led by the respected Oil cartel’s sheriff, Abdulaziz bin Salman had some time ago issued stern statements targeted at oil speculators who question the oil cartel’s resolve in boosting crude oil prices, to stay out, as he was ready to keep them out of business, such unusual warning from such high-level channel, shows how committed the Saudis are, on the macro level to keep price supported by using all its ammunition at its disposal in keeping to such goal.

So it shows why oil traders have such bias that crude oil prices are unlikely to trade at prices seen in April, keeping oil bears in check.

On the price pattern it’s very likely that COVID-19 disruption is now fully priced into the fragile energy market, as oil prices in the case of Brent crude ranged between $40-$45/Barrel, taking into account prices it traded at in Q2, Q3.

Analysts largely concur that oil prices are not expected to move much higher than current levels of around $40 a barrel until the rest of 2020, but neither are they likely as they did in the past as almost all negative factors seem to be priced in.

For a look at all of today’s economic events, check out our economic calendar.

Oil Traders Wary of High Downside Risks

The black liquid hydrocarbon is trading a tad weaker following the gains recorded yesterday. It’s key noting crude oil bulls seem to be suffering from exhaustion as it approached the $43/Barrel critical resistance level since it has taken the black viscous derivative several weeks in trying to break out above such levels, but growing concerns of global energy demand/supply rebalancing had curbed such hopes momentarily.

Amid bullish macros, expected to keep the price of crude hovering significantly higher like the recent restart of talks between the U.S Treasury and U.S Speaker coupled with the ongoing disruption of supplies from the North Sea region, by Norwegian oil workers coupled and the major hurricane storm disrupting oil production around the Gulf of Mexico it is fair to say the Bears still seem to be in control, as prices haven’t moved up as expected, meaning concerns the oil market is getting saturated still weigh heavy on the bulls.

Many energy analysts would normally have anticipated the shutting down of the Johan Sverdrup oilfield a giant oil platform by striking oil workers, will propel the oil bulls with enough gas to breach above the $43/barrel resistance level with ease, but growing concerns on recent political polls saying President Donald Trump, a pro-fossil leader has lower odds of winning the U.S Presidential election, as kept some oil traders off, in the near term, as the ever-changing geopolitical spectrum makes it challenging for traders to take positions strategically.

That said, it will be greatly unfair to rule the bulls out as recent macro, show a leading oil producer Saudi Arabia, raising its price tag on its flagship Asian grade, showing signs that energy demand is picking up howbeit gradually after six weeks of selling discounted crude grades amid falling demand.

Also, the Saudis led by the oil cartel’s Sherriff has shown high optimism that OPEC’s recent cut would help in stabilizing crude oil prices in the mid-term amid strong compliance efforts set in play by the major oil producer.

For a look at all of today’s economic events, check out our economic calendar.

 

Hurricane Delta Effect Minimal on Oil Bears

The price stability is riding on bias coming from the Gulf of Mexico, as oil workers get evacuated from their oil rig platforms in anticipation of Hurricane Delta, though growing concern about fuel demand concerns fading chances for more upsides as the world’s biggest oil consumer recently announced a build in its crude oil stockpiles.

Both major oil benchmark, that includes Brent crude and West Texas Intermediate traded above $40/barrel at the time of writing, with Brent crude prices hovering near the $42.10/Barrel.

The abiotic macro is presently lingering around the Gulf of Mexico with a Category 3 ranking, oil traders are wary such hurricane storm could disrupt the prevailing production capacity of about 1.5 million barrels per day, and might partly be responsible why the prices of the two major crude benchmarks trade above their key critical support levels amid a build-in U.S crude oil inventories released yesterday.

That said, the price action suggests Brent crude would be range-bound between the $39.50 -$43.50 in the near term as, there seem to be no strong macro driver, capable of propelling Brent crude prices breakout from its prevailing range at least until news like the introduction of an approved COVID-19 vaccine hits the headline, as the deadly COVID-19 virus, had already caused more than a million causalities globally, disrupted economic activities at unprecedented levels and most importantly distorted the energy demand/supply rebalancing order globally.

I think at this point it seems fair, saying oil bears have a higher probability of hitting an home run as crude oil might start falling off again since the hurricane storm effect looks priced in the fragile energy market already

These sentiments are strengthened as demand-driven commodities metrics show incredible fragility and even more so for crude oil in an environ, that has high degree of geopolitical uncertainty.

For a look at all of today’s economic events, check out our economic calendar.

Oil Bulls Run Halted by President Trump’s Tweet

U.S. West Texas Intermediate (WTI) and Brent crude (LCOc1) futures prices were down more than 1%, after both major benchmarks gained over 3% at U.S trading session on Tuesday

Oil traders, are also observing the health status of the world’s most powerful political leader, as he still remains treated for COVID-19 infection, and the bearish bias got strengthened when he announced via his twitter handle, he was terminating discussion with the opposition party on an economic aid deal for his COVID-19-hit economy with the United States presidential election only weeks away.

The bears are now taking charge, as the prevailing challenge on-demand rebalancing came to bear when recent statistics from the American Petroleum Institute revealed U.S. crude oil inventories gained by 951,000 barrels last week – more than anticipated by energy analysts.

However, the selling pressure presently occurring at the oil market was curbed as major oil companies around the Gulf of Mexico were battling hard to secure their offshore oil production platforms as Hurricane Delta took sway on U.S. oil output around the vital energy hub in the American continent, which is responsible for about 17% of total U.S. crude oil production

In addition, oil prices are still holding a large part of Tuesday’s gain, as the latest oil barometer, President Trump got discharge from Walter Reed hospital, and other exogenous factors which include, a major crude oil producer Norway announcing, it will be curbing some of its oil supply.

It’s fair to say that the ever-changing energy market would shift focus now on-demand rebalancing, although as the U.S election fast approaches, price volatility is expected to be in play.

For a look at all of today’s economic events, check out our economic calendar.

Latest Oil Barometer resides in White House

Both major benchmarks broke above their key support levels as Brent crude prices surge pass the $40/ barrel support line, to hover around $41/Barrel, at the time this report was drafted U.S. West Texas Intermediate prices also breached above its critical support level of $38.50/barrel, as another storm lingers around the Gulf of Mexico, raising concerns, on oil production being distorted in the near term.

It’s important to note that in Q3, 2020 crude oil prices have paused below the 20-month exponential moving average which is now at around $43/Barrel, looking more into this prevailing price action means, for the bullish momentum to remain on course, oil traders will have to break the critical resistance area of $43.50/ barrel.

Sequel to this recent bullish run, oil traders won’t forget in a hurry, the influence President Trump has on crude oil prices, with the black liquid fossil losing over 4% last Friday amid growing uncertainty surrounding Trump’s health, meaning that Donald’s Trump health status has become the latest oil barometer, traders are watching closely for future guidance, in the ever changing oil market.

On the abiotic side, a positive macro triggering the bulls to keep up with their pace, is another hurricane storm, lingering around the Gulf of Mexico, with many oil workers evacuated from their oil platforms as tropical storm Delta heads toward Louisiana and Florida, raising concern that these oil rigs might not maintain optimal capacity in Q4, 2020, as further kept the bulls up to support crude oil prices.

The bulls seem not to be short of positive fundamentals as ongoing talks by Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on the long-overdue stimulus package is expected to continue later today, would likely keep the bulls affirmative on hold their present gains.

Therefore it’s fair to say the bulls are now in charge, at least in the near term.

For a look at all of today’s economic events, check out our economic calendar.

Oil Traders Wait on Pro-Fossil Leader’s Health Recovery

A positive update on President Trump’s health and his increased likelihood of winning the highly contest election would also trigger prices of crude up arbitrarily as under his belt the United States became the largest producer of the black fossil and also maintained its charge as the leading producer of natural gas, coupled with his pro fossil polices, in spite of the consistent outcry of leading environmental groups.

The two major oil contracts, Brent crude, and West Texas Intermediate lost about 8% in the previous week as if that wasn’t enough the US House Speaker Pelosi and U.S Treasury Secretary failed to secure the long-awaited stimulus deal package, with President Trump temporarily out of the picture oil traders will be wary ongoing bullish in the near term as there seem to be no uniting factor at the U.S Capitol now in putting the deal through.

Also OPEC is due to taper their crude oil output cuts by 2 million barrels per day in January 2021. Knowing that oil traders and major oil-producing countries are now in a precarious situation, with prevailing gasoline demand melting like ice-cream in the sun the odds for OPEC increasing production in Q1, 2021 seems to be low as such a move will take the price of crude below $35/barrel amid high probability that the present fragile oil market is already approaching saturation level.

That said, some energy experts believe a significant number of oil traders remain optimistic in the long run on the basis that the recent monetary policies being printed out of the world’s largest economy are ultra-dovish and the higher odds favoring the introduction of an approved COVID-19 vaccine hitting the market by Q1, 2021.

These fundamental drivers stated above are expected to keep crude oil prices above $30/barrel mark in the long term even if they temporarily disappoint in the near term.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Prices Drop, Pro-Energy Leader Gets COVID-19

Crude oil prices were down over 2% after news broke out to the public, on President Trump testing positive to the COVID-19 virus.

West Texas Intermediate was already heading for losses of more than 5% this week, while Brent crude prices were on the track of more than 4% decline, in a second consecutive week of price declines in both major crude oil benchmarks.

Oil traders are concerned about the health of the most important leader as under his belt, America became the largest producer of crude oil and also maintained its position as the leading producer of natural gas.

In addition, the world’s largest economy energy exports reached an all-time high in 2019, marking the first time in more than six decades that its annual gross energy exports surpassed its gross energy imports.

Such data has reveals how President Trump’s support for the crude oil industry, can’t be overlooked, as his health concerns triggered the West Texas Intermediate futures to fall far below its critical support level of $38.50/barrel.

That said, it becomes unsurprising that volatility in the oil market is up at record levels, knowing that President Trump’s energy policies had favored the oil industry via opening more federal regions to drilling and reviving the Keystone XL pipeline project that his predecessor rejected.

On other prevailing macros, Oil traders, are doubtful of a Pelosi -Mnuchin brokered US fiscal deal, as political infighting get a spot on major headlines coupled with an implied energy demand weakening and the increased odds that COVID-19 vaccines might not be ready in Q4,2020.

Oil prices might continue to be under increased pressure if both parties leave the negotiating table without putting a substantial deal, before the U.S Senate.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Traders Hoping to Forget September Quickly

Oil traders in the last few days had to withstand the roller coaster moves in this prevailing oil market, as in for the case of Brent crude tested its critical support level around $40/barrel before springing up at the U.S trading session on Wednesday partly due to the U.S dollar losing some of it gains momentarily.

Growing energy supply from the Organization of the Petroleum Exporting Countries (OPEC) weakened oil bulls’ resolve in reaching new highs, as crude oil output surged by 160,000 barrels per day in September from August

Brent crude has recorded a loss of about 6% this month, on mounting worries about the impact on gasoline demand as the COVID-19 onslaught kept its hold on major headlines around the world.

Also adding to the woes of crude oil bulls were the macro coming from Libya as it will be adding more oil outputs to a supposedly saturated energy market.

The bulls would definitely want to forget the month of September in a hurry with recent statistics printing U.S monthly average of fuel demand in the previous week drifted lower, showing the significant effect of rising COVID-19 caseloads that’s seems to be hampering global economic recovery efforts.

It should be said, on humanity side, COVID-19 virus as killed over a million people and still shows no signs of stopping, meaning that it’s unlikely for economic activities to resume at optimal capacity till next year.

As if that, not enough growing political tensions particularly around the world largest consumer of energy, has halted the bullish gains seen in the months of June, July, and August, as odds against the pro-fossil leader increase to election day coupled with high uncertainty on how the U.S election will play out, thereby lowering the probability on crude oil prices closing above $55/ barrel in 2020.

India another important consumer of crude of late revealed the output of crude oil refiners in the month of August dropped by 26.4% from a year ago, the most in more than 16 weeks, as fuel demand paused because of the effect on the ravaging COVID-19 onslaughts on industrial and transportation activity.

For a look at all of today’s economic events, check out our economic calendar.

U.S Dollar Limits Gold Price Move Above $1,900/Ounce

Gold prices dropped amid a rigorous presidential debate held in the world’s largest economy. The two leading presidential candidates failed to assured investors on key macro-economic issues, leading to a drawdown in U.S stock futures amid the U.S dollar showing some strength relatively.

Gold futures bears are waiting for a clear breach at the $1,895 support line to affirm their bias, which in turn can give the bears the needed gas in pushing price towards the monthly low around $1,850/ounce.

Sequel to the prevailing price action it should be noted that gold prices breached above the $1,900/ ounce price level on Tuesday, as the U.S dollar dropped momentary-on growing political uncertainty and the anticipated outcome of the US presidential debate held hours ago.

That said, it seems the bulls are exhausted as price rejection patterns form arbitrarily around the $1,900-1904.60/ounce price levels.

The odds for gold bears in the mid-term seem to be credible if the U.S election goes smooth as anticipated, coupled with, the introduction of a COVID-19 vaccine and favorable U.S employment data in October, could further take the bears below the $1,800/ounce price level, as present market indicators show lesser buying pressures in recent weeks amid strong gains recorded on global equities in 2020.

On the flip side, on the long term, odds still favor the precious metal, as growing geopolitical concerns and ongoing US-China tensions suggest uncertainty is an asset that gold traders now readily have abundant at their disposal.

Still, the yellow metal rebound remains constructive while within this near-term formation but the broader outlook remains tilted to the downside within the August drop. From a trading standpoint, look to reduce long-exposure / raise protective stops on a test of the upper parallels

For a look at all of today’s economic events, check out our economic calendar.

Oil Traders’ Fears Outweigh Hopes on Global Economic Recovery

Oil traders are reacting to the rising oil rig count data from the world’s largest economy. Recent data obtained from Baker Hughes printed the total rig count up by four to 183, which is the highest seen since last month.

At the time this report was written, both major crude oil benchmarks were down more than 0.9% but traded above $40/barrel.

A surge in the number of rigs is usually an early sign of increased oil production, and it’s critical to note that demand rebalancing is majorly what oil traders are focusing their minds on, as traders won’t forget in a hurry the stern warning signs coming from international energy bodies which include OPEC, International Energy Agency, Energy Information Administration warning gasoline demand remains fragile and is likely to slow down as the ravaging COVID-19 onslaughts grow at unprecedented levels.

Another damaging report, dampening the mind of crude oil bulls is the number of new COVID-19 caseloads in the world’s largest economy gaining for the second week in a row in 27 out of the 50 states, adding to concerns over the health of the U.S. economy.

Globally, deaths from the virus topped one million, with over 33.2 million cases as of Sep. 29, according to Johns Hopkins University data.

Also, oil trading juggernauts and leading energy experts in recent times have anticipated a blurred energy demand outlook on the bias that consumer demand will slow down in the last quarter of 2020 as economic activities in the northern hemisphere are expected to cool with the temperature, leaving refiners with a possible oil glut.

That said, for crude oil bulls to regain momentum traders, they will need more positive macros like higher odds for Trump’ reelection, as he remains the most pro-fossil political leader in more than a decade, coupled with a lasting solution to the exploding COVID-19 onslaught.

Although some experts attribute the rise, in COVID-19 caseloads to the current testing hit rates, it may take some time for Covid-19 caseloads growth starts to ease, meaning oil bulls will remain penned up for weeks or longer.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Traders Wary, on Energy Demand Rebalancing

Traders are becoming nervy on the pace of global economic growth, as rising cases of COVID-19 continue to make major headlines.

Brent crude, the global benchmark for the black liquid derivative, closed at $41.92 suffering losses of 3% w/w.

U.S crude oil prices settled at $40.04 per barrel, posting a plunge of 2.1% w/w.

The latest oil cartel’s meeting held late last week failed in calming the edgy nerves of oil traders, as there was no strong reaffirmations by major producing members on oil production cuts till the close of 2020.

Also, macros, coming from Africa’s leading oil producer, revealed the Libyans planned to raise its oil production output by around 260,000/barrels per day in the coming days up from about 100,000/barrels per day. Such a report has already led to price pullbacks at its most recent trading session, with crude oil bulls extinguishing some of their long positions momentarily.

Another valid macro, dampening the hopes of crude oil bulls is the latest statement coming from St. Louis Federal Reserve President James Bullard, on his bias that there might be no need for additional stimulus packages for the world’s largest consumer of oil in 2020 based on the ongoing adaptation of businesses and households to coping with the COVID-19 pandemic.

Although it’s expected West Texas Intermediate prices remain above the $38.50/ barrel in the near term as the Chinese of late had increased buying pressures on U.S. crude, perhaps in an attempt to meet up its obligations on the energy import quotas agreed with the Americans in 2019 and also taking advantage of the relatively cheap price of the black liquid derivative.

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Metal Traders Remain Wary on Strong U.S Dollar

Precious metal prices have been under attack lately as gold bears keeping hampering on amidst rising Covid-19 cases in Western Europe and the United States, bringing the price of gold futures below $1,900/ounce.

For now, the recent price movements in the yellow metal’s market shows the bulls are in a precarious situation in spite of its recent upside. It’s very likely that the selling pressure continue at least in the near term, as U.S dollar bulls seem to be awakened with enough gas to hit near a month high amid pending U.S stimulus packages.

The attack on gold bulls started on Monday when gold prices dropped momentarily to $1,909/ounce, losing about $41 in a single day. Thinking the worse was over became a joke, as shocked bullion traders watched the price of their safe haven assets drop arbitrarily to the $1853/ounce support level before the bulls got some healing and kept gold futures up to trade at $1875/ounce, at the time this report was drafted.

It should also be observed that the last time gold futures prices dropped below $1,900 support level was July ending, hinting gold prices might just have entered a bearish consolidation phase as its been seen oscillating in ranges of $1,850- $1,875/ounce.

Even though the U.S dollar dropped some gains at Friday’s trading session, the bullion assets upward moves have remained limited coupled with low market liquidity presently in play on the bias that the greenback will likely be in demand at least through the end of September.

Present price action, shows the precious metal still struggling and underperforming but if the riskier assets like global equity markets keep up their bearish run relatively, the bears could be kept in check, and gold prices hover above $1,900 price levels.

Having said that, the price correction in the gold market has come quite far now, and It doesn’t look there is enough bearish bias in the tank to test out the key $1,850 levels this week.

For a look at all of today’s economic events, check out our economic calendar.