Oil's volatility has climbed to its highest levels since February. The main reason for this is the meeting of OPEC, which will be held at the end of this week - Thursday and Friday in Vienna. The question that concerns all market participants is whether group members will maintain production restrictions that have raised black metal prices to $ 70 a barrel or there will be a change in the agreement that reduces daily production by 1.8 million barrels from the market for the past 18 months. Russia is pushing to return a million barrels a day to the markets. Saudi Arabia will most likely try to reduce the number to prevent prices from falling too much. But, not all OPEC members agree. Iran, Venezuela and Iraq are of the opinion that the current agreement is good and should be maintained. Gold prices lost more than 4% on Friday, as traders expect an increase in global supply.
A quick look at Oil's chart and we can see the breakaway of the trendline starting in February this year. There is a Head & Shoulders trend-reversing formation, and the price broke and tested successfully the neckline of the figure. In other words, the formation is activated, which means that the technical picture here supports the rather negative expectations of the weekend meeting.
Execution of the figure 1:1 will lower oil prices to their 200 SMA on daily chart, around $ 60 per barrel.
Graphic: Used with permission of Bloomberg Finance L.P.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.