What is OPEC and what are its functions?We all know about such raw materials as oil and the products that are produced from it. At the same time, everyone knows perfectly well that the extraction of black gold is carried out from the bowels of the earth. There are quite a small number of oil-producing countries on the whole Earth, the association of most of which is called OPEC. In this article, we will learn the history of the creation of the union, its impact on the shares of OPEC oil companies, the benefits of the cartel itself, the impact of OPEC on the stock market, what is the OPEC oil reserve, as well as where to find a live chart of OPEC oil prices and OPEC stock prices.OPECOPEC is an association of countries that export oil around the world. Structurally, OPEC is a cartel, that is, a community of participants who coordinate actions and strategies.The organization itself was founded as a result of the Baghdad Conference held from September 10 to 14, 1960.The founding countries were:Saudi Arabia;Iran;Iraq;Kuwait;Venezuela.At the moment, about 80% of the planet's oil reserves are located on the territory of the OPEC countries in total. In the field of production, this value reaches 40%, while global oil exports consist of OPEC supplies for half.Most of the OPEC members are relatively poor states, but as a single organization, they all have a serious impact on the price of oil and the world economy and politics. Saudi Arabia occupies a special position in OPEC.HistoryUntil the mid-1950s, oil was relatively inexpensive. Although it was a product of strategic importance, however, it did not have such importance as it is now. The main competitor of oil was coal, and the consumption of black gold was incomparably lower.Until the early 60s, the oil trade around the world was significantly controlled by 7 Oil companies. For the convenience of coordination, these companies created an international oil cartel, whose goal was to keep in the range of $1.5-3. At the same time, the most numerous oil deposits and the best conditions for its production were in the third world countries. At that time, these states had long wanted to overthrow the dictate of international corporations and fully earn on exports.On the verge of independenceThe OPEC member countries were dependent states about 50 years ago, and therefore they tried to get rid of this exploitation in various ways. This factor has contributed to the rapprochement of these States and their interests. However, none of these countries could defeat the Western states on their own. For example: in 1951, Iran tried to nationalize the Anglo-Iranian oil produced at that time, but was immediately subjected to crazy economic pressure from the United Kingdom, the United States and the International Oil Cartel.The purpose of creating OPECAt the time when the first composition of OPEC was formed, a surplus of sold oil was formed on the world market. This surplus was formed largely due to the active development of large oil fields in the Middle East. In addition, the USSR joined the world trade in black gold, which doubled the volume of production for the period from 1955 to 1960. This led to increased competition in the raw materials market, which, as a result, ensured a constant decline in prices.Thus, the creation of OPEC was primarily necessary for effective coordination and prevention of a decrease in prices for oil products. Since the world market was overflowing with oil in the 60s, OPEC's initial task was to apply oil production restrictions to stabilize prices.The first stepsBack in 1949, at the initiative of Venezuela, there was a rapprochement of the oil-producing countries. This state made contact with the powers of the Middle East and offered to come up with a way of mutually beneficial cooperation. However, this idea was not crowned with success, since the Arab partners did not yet have sufficient independence. Moreover, they retained the power of monarchs, who were not particularly willing to engage in dialogue.In 1959, oil corporations lowered the price of raw materials, which caused Venezuela to lose a huge amount of money at that time - $140 million. This case led to the unification of the oil exporting countries, during which the first Arab oil Congress was held in Cairo. The participants of the congress demanded that the oil companies must agree on actions with the leadership of the oil-producing powers before making any decision on the price of raw materials. In addition, it was proposed to create a special commission on oil issues.BackgroundBefore getting acquainted with the composition of OPEC, we note that the first signs of the emergence of the cartel appeared back in the 1930s at the time when the development of oil fields began in the Middle East. One of the first oil-bearing sources was Baghdad. In 1934, production began in Bahrain, in 1936 - in Kuwait, in 1938 - in Saudi Arabia, and after 1945 - in other countries.Read more: Bulls and bears, as well as other animals on the stock exchangeSince these powers did not have their own finances and human resources for oil production, emigrants were attracted to the development of mineral resources. The leader in this issue was five companies from the United States: Exxon Mobil, Texaco, Mobil Oil, Standard Oil Company of California, Gulf Oil. Later, the British "British Petroleum" joined the Americans.Very soon, the arrogance of these companies increased so much that the requirements of the laws of certain countries were simply ignored. In addition, the British and Americans took control of the natural resources and activities of countries with oil-rich lands. In 1960, thanks to the creation of OPEC, the countries of the Middle East were finally able to resist foreign oil giants.It is interesting that in most oil-producing countries, this type of activity is the main source of attracting foreign currency. Due to the extremely backward economic structure, the foreign trade transactions of these states are based only on oil. For example: in the United Arab Emirates, Saudi Arabia and Libya, the share occupied by petroleum products in exports is 100%. In Iraq, this value is 99%, in Qatar-98%, in Kuwait, Iran, Nigeria-93%, in Algeria - 85%, in Gabon - 77%, and in Indonesia - 69%.New playerAfter the creation of the cartel, seven more organizations joined the original five organizations. Thus, their number has expanded to 12. All OPEC member states have achieved independent control over their natural resources and their exploitation, taking into account only national interests. On September 1, 1965, OPEC found its Secretariat in Vienna.How it functionsDuring all this time, the composition of OPEC has changed several times. Nevertheless, the main organs remain the same:The ConferenceThe CouncilSecretariatThe Conference is a body that has a great influence. It is headed by the General Secretary. Meetings of the heads of energy ministries and other representatives of states are held twice a year within the framework of the conference. However, the main task of these negotiations is always to determine the state of the world oil market. Moreover, OPEC members are developing a plan to maintain stability in the market. Special attention is paid to the forecasts of the future situation in the world of oil and oil products.It should be noted that the organization, consisting of 12 states, owned most of the oil fields around the world. In the 1990s, Gabon left the organization, and Ecuador independently suspended its membership until the fall of 2007. Russia became an observer of the organization in 1998.OPEC basketThe cartel has adopted such a term as the OPEC basket. In short, this expression means the arithmetic average of the prices of oil grades produced in the member countries of the association. Today, OPEC members pay attention not only to the cost of a single variety, but also to the price of the entire OPEC basket. If we compare the graph of the oil basket and the graph of the share prices of OPEC oil companies, we will notice a correlation.Here is the full list of OPEC member countries:AlgeriaIranAngolaKuwaitIraqGabonEcuadorLibyaNigeriaQatarEquatorial GuineaSaudi ArabiaThe average value of the oil price of these countries is the basket.Consequences of the OPEC organizationOver time, the demand for oil increased, and the OPEC member countries carried out several coordinated actions. For example, the Arab participants established an oil embargo of Western countries in the 70s because of their support for Israel. In response, the price of oil on the world market soared by 400%: from $3 to $12. At the peak of demand-in the summer of 2008, a barrel of oil was already worth $140.73.What is OPEC+ and what is the difference from OPECOPEC+ is an association of countries that are not members of OPEC, but cooperate with it on issues of oil production and export. OPEC+ is less organized, but still has large oil reserves and has influence on the world market.OPEC+ appeared in 2016 against the background of dissatisfaction with the activities of OPEC by major oil exporters, and now the price of OPEC oil is currently determined by OPEC+.Both in OPEC and in OPEC+, no country is subordinate to another, although there is an unspoken influence. To present the current state of affairs in the oil market, let's get acquainted with the list of the main countries producing and exporting oil.Which countries are members of OPEC+?OPEC+ includes:Azerbaijan;Bahrain;Brunei;Kazakhstan;Malaysia;Mexico;Oman;Russia;Sudan;South Sudan.Statistics of countries on the level of oil productionThis was the state of the distribution of world oil production by in 2020:USA – 15.8%;Russia – 13.5%;Saudi Arabia – 12.1%;Canada – 5.7%;Iraq – 5.6%;China – 4.8%;United Arab Emirates – 4.4%;Brazil – 3.8%;Kuwait – 3.6%;Iran-2.5%;Venezuela – 2.8%;Mexico – 3.3%;Nigeria – 2.3%;Norway – 2.1;Angola – 2.0%.The share of other countries is smaller, as a result of which, if necessary, they unite with the leaders. This list clearly demonstrates that the OPEC+ member countries are far from inferior to the OPEC member countries, which forces both associations to seek compromises and negotiate.You can always find out the schedule of OPEC oil prices, OPEC+ and the schedule of prices for shares of OPEC oil companies here.Oil production in the Persian GulfThe main difference is the cost and transportation of raw materials. This allows Saudi Arabia, Iran and other countries of the Persian Gulf to be in the best conditions. Simply put, in the Persian Gulf:Oil usually lies shallow and gushes, that is, it does not require complex pumping equipment;Raw materials are extracted in the conditions of the so-called "eternal summer". There is simply no risk of freezing of wells.The ports are located in close proximity to the production sites. The cost of pipelines is minimal.The cost of oil production is from $8.5 to $12.6.The average break-even price, taking into account transport, taxes, etc. - from <$10 to $22.USA and CanadaAnd how are things with the United States and Canada? Most of the production in the United States is shale oil. This is a completely different method of production, which is very different from production in Russia, Arabia, and other countries. Here, too, briefly:Shale oil is more expensive and it is not always profitable to extract it: at the world price of about $50/barrel of Brent grade.Nevertheless, it is easier to stop shale production in the event of a fall in prices, as well as to resume with an increase.Companies producing shale oil in the United States and Canada are able to protect themselves with financial instruments, that is, they are insured by banks against losses when prices fall.The average break-even price of oil in the United States is $40-49.Why is the US not a member of OPEC or OPEC+?There is always some tension in relations between oil-producing countries. The first reason is different interests and conditions; the other reason is economic and political moments that are unique for each state separately. The United States failed to fit into the format of relations and, with high oil prices, occupied a large niche in the oil market.Another nuance: US companies, in accordance with American law, cannot participate in cartels, since the state authorities simply do not have the right to dictate the volume of production and the level of value to them. This made it difficult for America to partner with other states.How OPEC news affects the world and the economyTo begin with, we note that OPEC news is published regularly: OPEC shares are rising or falling, the cartel calls for reducing oil production or, conversely, increasing it. All these information flows are reflected in the share price of OPEC oil companies and on the charts of OPEC oil prices. The association is acutely reacting to OPEC's own oil reserves in storage, which is seasonal due to uneven oil use and weather conditions.Recently, the number of drilling platforms producing oil in the United States has been growing at a record high and already stands at 387 units. The increase in the cost of oil has a positive effect on the budget and the share price of oil companies. This attracts additional investments and stock market participants for trading, which causes the growth of shares of OPEC oil companies. Negative news and expectations put pressure on the share price of oil companies, which often seriously affects the state of the entire ...
EUR/USD: bearish trend remains in forceThe EUR/USD pair is showing a moderate decline during Asian trading, continuing to develop the downward momentum formed earlier: quotes are testing the 1.0400 level again, declining from local highs on December 18. The activity of market participants and transaction volumes are gradually weakening, which is associated with the approach of the Christmas and New Year holidays, against which investors are taking a wait-and-see attitude.Pressure on the euro remains due to the current monetary policy of the European Central Bank (ECB) and recent comments by the head of the regulator, Christine Lagarde, in an interview with the Financial Times. She expressed concern about the continued rise in prices in the service sector, which remains at around 4.0%. Lagarde also spoke out against possible EU retaliatory measures to impose additional duties from the United States, pointing to their potential negative effect on households and businesses. Against the background of such statements, market participants are reviewing expectations for the rate of interest rate cuts in 2025, but questions about the pace of economic recovery remain open. In December, the ECB cut its key interest rate again by 25 basis points. November inflation accelerated from 2.0% to 2.3%, and forecasts suggest it will rise to 2.4% in 2024 and 2.1% in 2025, followed by a decline to 1.9% in 2026, which is below the target level. Additionally, the ECB confirmed its intention to continue reducing its bond portfolio under the PEPP program by 7.5 billion euros per month.Resistance levels: 1.0400, 1.0450, 1.0500, 1.0554.Support levels: 1.0350, 1.0300, 1.0253, 1.0200.GBP/USD: the pair is moving down, reflecting the medium-term bearish dynamicsIn December, the GBP/USD pair resumed its downward movement within the framework of a medium-term downtrend, testing the level of 1.2490, corresponding to a 50.0% Fibonacci retracement. The pressure on the pound increased after the release of macroeconomic data, which reflected a slowdown in economic activity in the UK.In particular, the gross domestic product (GDP) did not change in the third quarter, contrary to analysts' expectations, which assumed an increase of 0.1%. Industrial production also decreased by 0.7% in October, and the aggregate business activity index fell to 50.5 points, due to business concerns about the growing tax burden initiated by the Labor government. As a result, the country's economy may enter a state of technical recession. At the same time, inflation remains at a high level: in November, the consumer price index was 2.6%, and the base index rose to 3.5%. In such a situation, the Bank of England is unable to continue its soft monetary policy, which limits the incentives for economic recovery and increases pressure on the British currency.Resistance levels: 1.2695, 1.2939, 1.3061.Support levels: 1.2490, 1.2300, 1.2095.USD/CHF: Swiss authorities' investigation reveals reasons for Credit Suisse collapseThe USD/CHF pair is showing a steady upward trend in the morning, developing the momentum that began the day before, and is striving to overcome the 0.8990 level. Despite the low activity in the market ahead of the Christmas holidays, the main attention of bidders is focused on the outcome of the US Federal Reserve meeting, where interest rate changes were discussed.Last week, Switzerland presented statistics on foreign economic activity: exports in November decreased from 27.83 billion to 23.68 billion francs, imports — from 19.80 billion to 18.26 billion francs, which led to a decrease in the trade surplus from 8.025 billion to 5.424 billion francs. On Friday, the bankruptcy report of Credit Suisse Group AG, prepared by the parliamentary commission, was published. The 569-page document contains 30 recommendations for preventing similar crises in the future. Among the proposals: expanding the powers of FINMA, tightening capital requirements for systemically important banks, and introducing a resident qualification for members of the board of directors. The Committee noted that the mistakes of the Credit Suisse management were the key cause of the crisis: from 2010 to 2022, top managers were paid 39.8 billion francs in bonuses, despite cumulative losses of 33.7 billion francs. Additionally, it is indicated that the regulator unreasonably provided capital allowances in 2017, which prevented the timely identification of the bank's financial problems. The Government is invited to consider measures aimed at preventing similar situations in the future.Resistance levels: 0.9000, 0.9037, 0.9100, 0.91 30.Support levels: 0.8957, 0.8929, 0.8900, 0.8865.Crude Oil market analysisBrent Crude Oil prices are trading near the level of 72.00, showing sideways dynamics against the background of changes in global demand for energy resources.According to the latest report from the US Energy Information Administration (EIA), India will become the leader in hydrocarbon consumption in 2024, overtaking China. Forecasts show that India could reach 220,000 barrels per day next year, increasing it to 330,000 barrels per day in 2025. At the same time, China, against the background of an accelerated transition to renewable energy sources, will reduce the growth rate of demand to 90 thousand and 250 thousand barrels per day for the same periods. If in 2023 China accounted for up to 70% of global oil demand, then in 2024 the figure may fall to 20%, while India's share will grow to 25%. Already this year, India has taken a leading position in the supply of petroleum products to the EU, surpassing even the United States.Resistance levels: 73.50, 77.00.Support levels: 71.60, ...
EUR/USD: the regulator in the USA adjusted the rate by 25 bp.The EUR/USD pair continues to adjust, trading around 1.0375 amid the strengthening of the US dollar and growing expectations of further monetary easing by the European Central Bank (ECB) after the published data on a decrease in inflation.In November, the consumer price index in the eurozone fell from 0.3% to -0.3% on a monthly basis, and increased from 2.0% to 2.2% on an annual basis, which turned out to be lower than forecasts of 2.3%. The basic indicator excluding energy and food products fell from 0.2% to -0.6% on a monthly basis and remained at 2.7% on an annual basis. These results strengthen the case for continued rate cuts, which puts pressure on the euro.The US dollar strengthened to 107.80 on the USDX index after the decision of the US Federal Reserve to cut the rate by 25 basis points to a range of 4.25–4.50%. In addition, the regulator presented revised forecasts: inflation in 2024 is expected to reach 2.4% against 2.3% earlier, in 2025 — 2.5% instead of 2.1%. The GDP growth forecast has been improved to 2.5% in 2024 and 2.0% in 2025. The average rate by the end of 2025 is expected to be 4.4%, and in 2026 it will decrease to 3.9%, which is higher than previous estimates. In his statement, the head of the Fed noted that the US economy remains stable, the labor market is cooling, and inflation has slowed significantly over the past two years, although it exceeds target levels. He also stressed that the risks to inflation are generally balanced, but the current dynamics may include temporary factors.Resistance levels: 1.0410, 1.0580.Support levels: 1.0330, 1.0180.GBP/USD: UK has joined the CPTPP Economic AllianceDuring morning trading, the GBP/USD pair is held at 1.2590, partially recovering the losses incurred the previous day. The increase in quotations is due to technical factors, but traders are taking a wait-and-see position before the announcement of the results of the Bank of England meeting scheduled for 14:00 (GMT+2). According to analysts, the regulator's management will probably decide to leave the key rate at 4.75%, with eight of the nine board members supporting this decision.Wednesday brought disappointment in the form of inflation data: the consumer price index rose from 2.3% to 2.6% in November, and the base indicator increased from 3.3% to 3.5%, which slightly exceeded forecasts. Such dynamics signal the possibility of further revision of monetary policy by the Bank of England if inflationary pressure persists or increases in the coming months.On December 15, the United Kingdom completed the process of joining the Trans-Pacific Partnership, becoming a full participant in it. Within the framework of the alliance, the country waived import duties on palm oil from Malaysia, and also facilitated a number of procedures for trade with other members of the agreement. This step underlines London's desire to strengthen international economic ties and develop partnerships with 11 other member states of the association.Resistance levels: 1.2600, 1.2650, 1.2700, 1.2730.Support levels: 1.2550, 1.2500, 1.2450, 1.2400.Silver market analysisAfter a long period of consolidation above the 30.00 mark, the XAG/USD pair fell below this level, which is due to the strengthening of the US currency.The decline in silver prices is taking place against the background of the "dovish" rhetoric of the US Federal Reserve System. Each step to lower the interest rate, accompanied by statements by Fed Chairman Jerome Powell, puts pressure on the metals market. Powell stressed that the American economy is showing stability, and the forecast for GDP growth at the end of 2024 has been raised to 2.5% against the previously expected 2.0%. Moreover, the regulator is considering the possibility of a temporary pause in the cycle of monetary policy easing in order to strengthen control over inflation and bring it to a level below 2.0%. Such steps reduce the attractiveness of precious metals as a protective asset in conditions of stabilization of the economic situation.On December 18, the volume of silver futures trading decreased to 50.0 thousand, which is significantly lower than the maximum values of December 11 and 12 — 126.0–127.0 thousand. A similar reduction is observed in the option position, which yesterday amounted to 8,145 thousand, down from a peak of 22,706 thousand last week. This may indicate that market participants are not confident that silver prices will continue to rise and prefer to close positions, waiting for clearer signals for further action.Resistance levels: 30.00, 31.40.Support levels: 29.00, 27.40.Crude Oil market analysisBrent Crude Oil prices are showing a sideways trend, remaining slightly above the level of 72.00. The instrument was under pressure due to the growth of the US currency, which reached an annual maximum after the US Federal Reserve lowered the interest rate by 25 basis points and improved forecasts for economic growth by the end of the year.Investors drew attention to the agreement concluded between the Russian company Rosneft and the Indian giant Reliance Industries Ltd. The document provides for the transportation of 500.0 thousand barrels of oil daily to India for ten years, starting in 2025, which makes this deal the largest for the region. The implementation of the project will cover a significant share of Indian demand for hydrocarbons, and processed raw materials will probably be supplied to the countries of the European Union, filling the market deficit caused by sanctions against the Russian energy sector related to the conflict in Ukraine.Support levels: 71.23, 67.61.Resistance levels: 75.38, ...
EUR/USD: the market is preparing for the ECB's decision to lower key ratesThe EUR/USD pair shows a multidirectional movement, trading around the 1.0520 mark. Market activity remains low, as traders are waiting for the publication of key data on inflation in the United States, which may set the tone for further dynamics of the instrument.Tomorrow at 15:15 (GMT+2), the European Central Bank (ECB) plans to announce a reduction in three main interest rates — key, margin and deposit — by 25 basis points, bringing them to 3.15%, 3.00% and 3.40%, respectively. These measures are due to a slowdown in growth in major eurozone economies such as Germany and France, where business sentiment continues to remain low. The problems are most acute in the manufacturing and service sectors. However, experts emphasize that the current monetary policy of the ECB has an impact: inflation in the eurozone remains controlled. In November, the consumer price index rose from 2.0% to 2.3% in annual terms, in line with forecasts, and on a monthly basis it decreased by 0.3% after a similar increase a month earlier. The underlying indicator also strengthened to 2.8% year-on-year, despite a decrease in monthly terms. ECB President Christine Lagarde will hold a press conference at 17:15 (GMT+2), where she will announce the results of the meeting and, possibly, share forecasts for the further development of the region's economy. Market participants are waiting for her comments on the strategy of the financial authorities against the background of continuing global uncertainty and prospects for subsequent easing of monetary policy.Resistance levels: 1.0554, 1.0600, 1.0629, 1.0665.Support levels: 1.0500, 1.0450, 1.0400, 1.0350.USD/CHF: November inflation in the United States may become a driver for the pairThe USD/CHF pair continues to adjust, trading near the 0.8836 mark, against the background of the publication of neutral macroeconomic data.The Swiss consumer price index in November decreased by 0.1% month-on-month and rose from 0.6% to 0.7% year-on-year, remaining at minimum levels among the G10 countries. This is significantly below the target range of 0.0–2.0% indicated by the Swiss National Bank. As a result, experts are increasingly confident in the continuation of monetary policy easing: at the December 12 meeting, the interest rate is expected to decrease by 25 basis points to 0.75%. Forecasts suggest that by the end of 2025, the rate may drop to the range of 0.00–0.25%.The US dollar remains stable, trading around the 106.00 mark in USDX, in anticipation of November inflation data, which will be released today at 15:30 (GMT+2). The general consumer price index is expected to grow from 2.6% to 2.7% in annual terms and from 0.2% to 0.3% on a monthly basis. Core inflation, excluding food and energy prices, is likely to remain at 3.3% year-on-year and 0.3% month-on-month. Such data may support further Fed rate cuts of 25 basis points in December, however, the regulator may consider the possibility of a pause in policy easing early next year, given the risk of accelerating inflation under the influence of economic reforms of the administration of President-elect Donald Trump.Resistance levels: 0.8860, 0.9000.Support levels: 0.8800, 0.8680.USD/JPY: the pair maintains positions below the key zone of 157.70–152.00The USD/JPY pair shows sideways dynamics in the area of 151.54, where the yen is trying to strengthen its position against the background of a neutral movement of the US currency and expectations of a tightening policy by the Bank of Japan at the upcoming meeting.After the publication of key macroeconomic indicators, including data on the labor market and inflation, Japan's gross domestic product (GDP) in the third quarter reduced its growth rate from 0.5% to 0.3%, which coincided with analysts' expectations and confirmed the stability of the economy. Judging by the latest comments, the Bank of Japan may raise the interest rate at its meeting on December 19. Additionally, the price index for corporate goods in November remained at 0.3% month-on-month, while the annual rate increased from 3.6% to 3.7%. However, preliminary statistics on orders in mechanical engineering showed a sharp slowdown from 9.3% to 3.0%, reflecting the pressure of geopolitical factors and a decrease in foreign demand. The decision of the Bank of Japan will largely depend on the results of the meeting of the US Federal Reserve System scheduled for December 17-18. If the US regulator leaves the rate unchanged or reduces it by 25 basis points, the probability of raising the Japanese rate by a similar amount will increase significantly.Resistance levels: 152.40, 155.40.Support levels: 150.60, 146.90.Oil market analysisDuring morning trading, WTI Crude Oil demonstrates the strengthening of the "bullish" momentum that began at the beginning of the week. Quotes reached the level of 68.70, trying to overcome it against the background of stabilization of the situation in Syria, which previously could have caused disruptions in the supply of raw materials. At the same time, the projected growth in fuel demand in China next year has a restraining effect on the downward trend. Meanwhile, representatives of Saudi Aramco, the largest oil exporter, reported a decrease in supply prices for Asian countries in January 2025 to the lowest values since the beginning of 2021, due to weakening demand from China.Today at 15:30 (GMT+2), the market expects the publication of inflation data in the United States. Forecasts suggest an increase in the consumer price index in annual terms from 2.6% to 2.7% and on a monthly basis from 0.2% to 0.3%. The basic indicator, excluding volatile categories of goods, may remain at the level of 3.3% year—on-year and 0.3% month-on-month. Analysts believe that these data are unlikely to change current expectations for a 25 basis point interest rate cut by the US Federal Reserve at its December 17-18 meeting. According to the FedWatch Tool, the probability of such an outcome is estimated at 90.0%.Additionally, the attention of market participants is focused on data from the American Petroleum Institute (API), which recorded an increase in oil reserves for the week from 1,232 million to 0.499 million barrels, with a forecast decrease of 1.3 million barrels. Today at 17:30 (GMT+2), the Energy Information Administration (EIA) will publish its report: reserves are projected to decrease by 1.3 million barrels after falling by 5.073 million barrels earlier. The EIA also adjusted production forecasts: for 2023, the value was increased by 10 thousand barrels per day to 13.24 million, and for 2025, it was reduced by the same amount to 13.52 million barrels per day. The demand for oil, according to the ministry, this year decreased by 100 thousand barrels per day to 103.03 million, and the forecast for 2025 was reduced by 30 thousand barrels per day to 104.32 million.Resistance levels: 69.06, 69.47, 70.00, 71.00.Support levels: 68.30, 67.53, 67.00, ...
USD/CHF: breakout of 0.8920 will open the way to July peaksLast week, the USD/CHF pair tested the support level of 0.8755 during the correction, after which it began a reversal and is trying to develop an upward momentum.The US currency was supported by positive macroeconomic data: the number of people employed in the non-agricultural sector increased from 36.0 thousand to 227.0 thousand in November, which significantly exceeded analysts' forecasts of 202.0 thousand. The unemployment rate was expected to remain at 4.2%, and the average hourly wage increased by 0.4% on a monthly basis, which is better than expectations of 0.3%. These indicators strengthen the likelihood of a more cautious approach by the US Federal Reserve to further monetary policy easing.The Swiss franc weakened its position after the publication of inflation data for November. The consumer price index for the month decreased by 0.1%, and in annual terms it was fixed at 0.7%, which turned out to be lower than the projected 0.8%. As a result, the Swiss National Bank may continue to ease monetary policy. The head of the regulator, Martin Schlegel, previously announced his readiness to consider the possibility of reducing the interest rate to negative values in order to reduce the attractiveness of the franc as a safe haven asset.Resistance levels: 0.8920, 0.9050.Support levels: 0.8755, 0.8625.USD/JPY: Japan's GDP data surpassed forecastsThe USD/JPY pair shows multidirectional fluctuations, remaining around the 149.85 mark. The main attention of market participants is focused on macroeconomic data from Japan, which, despite its positive nature, does not have a significant impact on the dynamics of the asset.In the third quarter, the Japanese economy showed GDP growth from 0.2% to 0.3% in quarterly terms and from 0.9% to 1.2% annually. However, the GDP deflator slowed from 2.6% to 2.4%, indicating a decrease in inflation expectations, which may complicate the tasks of the Bank of Japan to tighten monetary policy. Business activity indicators also turned out to be higher than expected: the Eco Watchers current situation index rose from 47.5 points to 49.4 points, and the forecast for the development of events reached a similar value, exceeding the previous result of 48.3 points.The data released on Friday turned out to be mixed. The index of leading indicators decreased from 108.9 to 108.6 points, while the index of matching indicators strengthened to 116.5 points. Household spending fell by 1.3% in October, which is better than the projected decline of 2.6%. At the same time, wage growth accelerated to 2.6%, raising expectations about inflation. Against this background, Toyoaki Nakamura, a member of the Board of the Bank of Japan, stressed the need to take into account the dynamics of salaries and business sentiment of Tankan when making decisions on possible changes in interest rates. Market participants took these statements as a "hawkish" signal, which was reflected in the growth in the yield of 10-year bonds, which increased to 1.065%.Resistance levels: 150.00, 150.50, 151.50, 152.22.Support levels: 149.35, 148.64, 148.00, 147.00.Gold market analysisGold shows a smooth decline, falling back to the level of 2640.00 and testing it for a breakdown downwards. Despite the limited number of factors that can radically change the situation in the market, investor activity remains high, which is due to the analysis of Friday's data on the American labor market.Recall that in November, the US economy created 227.0 thousand new jobs outside the agricultural sector, which significantly exceeds the revised October figures of 36.0 thousand (previously 12.0 thousand) and analysts' forecasts of 200.0 thousand. The unemployment rate increased from 4.1% to 4.2%, in line with expectations, while the average hourly wage remained at 4.0% year-on-year, higher than the forecast of 3.9%, and amounted to 0.4% month-on-month with expectations of 0.3%. Although the data cannot be called unambiguously positive, market participants regarded them as a signal of a possible continuation of the easing of the Federal Reserve's policy at the December meeting.According to the latest data from the CME Group FedWatch Tool, the probability of a Fed rate cut by 25 basis points in December rose to 87.0%, whereas a week ago it did not exceed 70.0%. An additional confirmation of positive expectations was the growth of the consumer confidence index from the University of Michigan from 71.8 points in November to 74.0 points in December, which turned out to be higher than both the results of the previous month and preliminary forecasts of 73.0 points.Resistance levels: 2655.00, 2670.00, 2685.56, 2700.00.Support levels: 2630.00, 2613.50, 2600.00, 2589.61.Crude Oil market analysisWTI Crude Oil prices are approaching the 67.00 mark, maintaining a downward trend in the global market. This movement is due to the expectations of market participants that OPEC+ will extend the current restrictions on oil production for another three months.The decision to maintain the cuts is related to the cartel's desire to avoid instability in the winter. During this time, the organization's member countries plan to resolve issues related to incomplete fulfillment of obligations, after which the situation with global demand, especially from China, will become clearer. Experts note that the slowdown in China's economic growth this year has had a negative impact on energy consumption. In addition, the country's gradual transition to electric cars continues to reduce demand for traditional hydrocarbons.This week, the attention of market participants will be focused on data on oil reserves. According to forecasts, the report of the American Petroleum Institute (API) will indicate an increase in reserves by 1,232 million barrels, as it was a week earlier, and statistics from the Energy Information Administration (EIA) will show an increase of 1,400 million barrels, which will be a noticeable contrast after a decrease of 5,073 million barrels in the previous period.Resistance levels: 68.10, 71.80.Support levels: 66.50, ...
EUR/USD: investors' attention is focused on the crisis in FranceThe EUR/USD pair is correcting near the 1.0509 mark, demonstrating a decrease in interest in the US dollar, but at the same time not receiving sufficient support from the macroeconomic data of the eurozone.According to forecasts, the November index of business activity in the Spanish services sector will decrease from 54.9 points to 53.6 points, in Italy from 52.4 points to 51.1 points, in France from 48.1 points to 44.8 points, and in Germany from 51.6 points to 49.4 points. These data indicate a slowdown in economic activity even against the background of interest rate cuts by the European Central Bank (ECB) aimed at supporting businesses and reducing debt pressure. The combined indicator of business activity in the eurozone is likely to decrease from 51.6 points to 49.2 points, which will take it out of the positive zone for the first time since the beginning of the year.Investors' attention is also focused on the political situation in France, where Prime Minister Michel Barnier, bypassing parliament, is promoting a bill providing for an increase in the tax burden on businesses by $ 62.8 billion and a reduction in government spending by $ 42.0 billion in order to reduce the budget deficit of 6.1% of GDP. This step caused sharp dissatisfaction with the opposition, which initiated the procedure for passing a vote of no confidence in the government. The escalating crisis risks exacerbating the already difficult situation of the national economy, which continues to struggle with high inflationary pressures.Support levels: 1.0460, 1.0330.Resistance levels: 1.0540, 1.0680.NZD/USD: construction statistics brought down NZD positionsThe NZD/USD pair started the week with negative dynamics, holding around 0.5860 after the publication of fresh macroeconomic statistics from New Zealand.According to the report, in October, the number of construction permits issued fell by 5.2%, which is significantly worse than the forecast of 1.7%. The previous value was also revised downwards from 2.6% to 2.4%. Such data reinforce concerns about a slowdown in economic growth and a possible negative impact on gross domestic product (GDP). In the current situation, experts predict that the Reserve Bank of New Zealand (RBNZ) may consider options for lowering interest rates to stimulate business activity, which puts pressure on the national currency. However, there are also positive signals: trading conditions improved from 2.1% to 2.4% in the third quarter, which turned out to be higher than analysts' expectations at 1.8%. This factor can provide short-term support to the New Zealand dollar, deterring it from a deeper decline until additional catalysts appear on the market.Resistance levels: 0.6035, 0.6120, 0.6220.Support levels: 0.5860, 0.5800, 0.5600.Silver market analysisAfter a long period of decline, the XAG/USD pair is showing recovery and is holding at 31.06 during trading in the Asian session. However, there is no confident upward momentum yet.One of the main limiting factors remains the decline in interest in silver, both in the form of contracts and in the form of physical metal, which is in demand in industry. According to the Silver Institute, in 2024, the volume of investments in this asset may decrease by 15.0%, reaching only $ 208.0 million. The decline is particularly noticeable in the US market, where sales of investment bars and coins fell by 40.0%, which is the lowest since 2019. The reason for this trend may be both a reduction in the financial capabilities of market participants and their preference for more active instruments such as gold or oil. Nevertheless, certain positive trends persist. In particular, industrial demand for silver will increase by 7.0% this year, and investments in exchange-traded funds (ETFs) backed by this metal will grow by 8.0%. This growth will be the first improvement since 2020, indicating a recovery in interest from long-term investors and the industrial sector.Resistance levels: 31.40, 33.00.Support levels: 30.50, 28.70.Oil market analysisWTI Crude Oil prices continue to move towards the important 70.00 mark, supporting the optimistic mood in the global commodity markets. The weakening of the US dollar has become a key driver of the current positive dynamics, which helps attract investors to energy purchases.The focus of market participants is on the meeting of OPEC+ ministers scheduled for Thursday at 12:00 (GMT+2). It is expected that the cartel members will again be unable to come to an agreement on increasing oil production, postponing this decision for the third time in a row for a maximum period of three months. The previous adjustment of production volumes, scheduled for December and amounting to 180.0 thousand barrels per day, was also postponed from October. This uncertainty is related to the variability in the forecast of global demand for hydrocarbons, especially against the background of slowing economic growth in key consumer countries. Special attention is paid to China, where economic difficulties have been observed since the beginning of autumn, but their mitigation has been accompanied by the country's active transition to electric transport, which reduces oil consumption. This process, although gradual, is already having an impact on the market. According to Reuters analysts, Chinese oil companies predict a further decline in demand for raw materials, as electric vehicles continue to displace gasoline-powered vehicles.Resistance levels: 71.20, 74.10.Support levels: 68.60, ...
EUR/USD: ECB representative Mario Centeno called for a neutral rate levelThe EUR/USD pair shows indecisive dynamics, remaining near the level of 1.0480. Activity in the market remains moderate after stormy trading, which did not lead to significant changes in quotations. Yesterday's rise in the euro was due to statements by Donald Trump, who won the US presidential election, about his readiness to increase import duties on goods from China, Mexico and Canada, but without mentioning the European Union. This has led to speculation about a possible softening of his pre-election position on trade with the EU.Investors are focused on statements by representatives of the European Central Bank (ECB). Mario Centeno, a member of the Board of Governors, expressed the opinion that the interest rate should be returned to a neutral range, optimally decreasing to 2.0% in moderate steps of 25 basis points. However, Centeno also admitted the possibility of a more aggressive rate cut in December to support economic activity in the region. According to him, such measures will help bring inflation closer to the target level below 2.0%, which confirms the effectiveness of the current monetary policy. Most analysts share this opinion, believing that the rate may be reduced to 3.00% at the upcoming ECB meeting. Such a decision is expected against the background of the ongoing recession in the manufacturing sector: the business activity index fell from 46.0 to 45.2 points in November, although analysts predicted it would remain at the same level.Resistance levels: 1.0500, 1.0530, 1.0561, 1.0600.Support levels: 1.0450, 1.0400, 1.0350, 1.0300.GBP/USD: the pound quotes are preparing to riseThe decline in the GBP/USD pair slowed down in the range of 1.2505–1.2480, which is due to profit-taking on short positions opened during October and November, as well as the publication of unfavorable macroeconomic statistics from the United States.According to the Conference Board, in November, the consumer confidence index fell to 111.7 points, which turned out to be slightly lower than the forecast of 111.8 points. Additional pressure was exerted by the October report on new home sales, which fell by 17.3% instead of the expected decline of 3.6%. This was the most significant drop since 2010: total sales amounted to 610.0 thousand against the projected 730.0 thousand. Given the importance of this sector to the economy, such a recession may slow down the growth of gross domestic product (GDP) The United States in the coming quarters.Against the background of the released British statistics, the pound received support. The consumer price index (CPI) rose to 2.3% year-on-year in October, exceeding analysts' forecasts (2.2%) and the previous value (1.7%). On a monthly basis, the indicator was 0.6%, reaching its highest since April, which increased inflation risks. Such dynamics may force the Bank of England to postpone the decision to reduce the interest rate at its meeting on December 19. On Friday, the market's attention will be focused on the publication of financial stability reports and minutes of the last meeting of the Bank of England, where hints can be given about the future course of monetary policy. Experts also expect that the volume of consumer lending will grow from 3.8 billion to 4.1 billion pounds, and the number of approved mortgage applications in October will decrease from 65,647 thousand to 64,100 thousand.Resistance levels: 1.2715, 1.2870, 1.3055.Support levels: 1.2480, 1.2322, 1.2058.USD/CAD: сorporate profit in Canada decreased by 2.5% in the third quarterDuring the Asian trading session, the USD/CAD pair shows a correction at the level of 1.4070. The Canadian dollar remains under pressure due to the weakness of the domestic economy, and the growth of the US currency supports a confident upward trend.According to Statistics Canada (StatsCan), the completed reporting period for the third quarter showed a decrease in net profit before tax (NIBT) by 2.5%, which is equivalent to a decrease of 4.1 billion Canadian dollars. As a result, the figure reached 157.4 billion Canadian dollars. The most noticeable slowdown is observed in the financial sector, where a decrease was recorded in ten of the thirteen industries, and total losses amounted to 5.5% or 2.5 billion Canadian dollars, which led to a result of 44.8 billion Canadian dollars. In the non-financial sector, 17 of the 39 subsectors also reported a drop in profits, by an average of 1.3% or 1.5 billion Canadian dollars, which reduced the total to 112.6 billion Canadian dollars.Resistance levels: 1.4100, 1.4250.Support levels: 1.4010, 1.3820.Oil market overviewQuotes of WTI Crude Oil continue to move within the long–term downward channel, however, consolidation has been observed within it for the second month in the sideways range of 67.19-71.88.Last week, the price rose from the lower boundary of this corridor to the level of 71.80, which was associated with increased geopolitical tensions. This happened after the US authorities approved the use of American weapons for strikes on Russian territory, which could potentially damage the oil infrastructure. However, on Monday, the price of oil fell again amid statements by US President-elect Donald Trump about plans to impose duties of 25% on all imported goods from Mexico and Canada, as well as an additional 10% on products supplied from China. Despite the fact that Canadian oil is likely to be exempt from restrictions due to its high importance, measures aimed at reducing Chinese exports increase concerns about a further decline in global oil demand. Additional pressure on the market is exerted by the truce announced today between Israel and the Lebanese organization Hezbollah. This interim agreement helps to reduce geopolitical tensions in the Middle East and reduces the risks of disruptions in the supply of hydrocarbons from the region.Resistance levels: 71.88, 75.00, 78.12.Support levels: 68.75, 65.62, ...
GBP/USD: Deputy head of the Bank of England doubts the stability of inflationary trendsThe GBP/USD pair maintains an unstable "bearish" trend, trading near the 1.2550 mark and demonstrating attempts to break it. The dynamics of the pound today were negatively affected by data from the British Consortium of Retailers (BRC) on the retail sales index for November: the indicator fell by 0.6% after a 0.8% decrease in October, increasing concerns about the weakness of consumer demand in the UK.Deputy Governor of the Bank of England Claire Lombardelli discussed three possible scenarios of economic development proposed by the Monetary Policy Committee and their impact on inflation and rates. The first scenario assumes that reducing external shocks will allow inflation to gradually return to the target level of 2.0%, which will create conditions for more active monetary policy easing. The second scenario, which corresponds to the current position of the regulator, assumes the preservation of strict parameters to control wage and price growth. Lombardelli noted the likelihood of a slowdown in wage growth to 3.5–4.0% and stabilization of inflation around 3.0%. The third scenario is of the greatest concern, which is associated with deep structural changes in the country's economy, which can provoke a prolonged inflationary cycle.Tomorrow at 15:30 (GMT+2), the market will focus on the final data on US GDP for the third quarter: it is expected that the indicator will remain at the level of the previous estimate of 2.8% in annual terms. In addition, investors are waiting for statistics on household income and expenses, as well as the price index of personal consumption expenditures — a key indicator of inflation for the US Federal Reserve. A slight acceleration in annual terms is predicted from 2.1% to 2.3%, while the base index may increase by 0.3% on a monthly basis and 2.8% on an annual basis.Resistance levels: 1.2600, 1.2650, 1.2700, 1.2730.Support levels: 1.2500, 1.2450, 1.2400, 1.2350.USD/CHF: employment data supported the strengthening of the francThe USD/CHF pair recorded a decrease from the level of 0.8957 reached last week to the level of 0.8870, against the background of the publication of macroeconomic data from Switzerland.In the third quarter, employment in the country increased to 5,528 million, exceeding the expectations of analysts who had predicted 5,500 million, and improving the result of the previous period of 5,499 million. This growth may become an important factor for the Swiss National Bank when deciding on further monetary policy at its meeting on December 12. Given the positive signals from the labor market, the regulator may keep the current interest rate at 1.00% or even consider raising it. At the same time, the attention of market participants is focused on the meeting of the US Federal Reserve scheduled for December 18, where the cost of borrowing is likely to decrease, which may increase pressure on the US dollar.An additional driver in the markets was the appointment by Donald Trump of a new US Treasury secretary. He became 62-year-old Scott Bessent, a respected professional with extensive experience in financial management on Wall Street. Introducing his candidacy, Trump stressed that Bessent is not only an outstanding investor, but also a recognized expert in the field of geopolitics and economics. The appointment provoked a positive reaction from experts who are confident that the new head of the Ministry of Finance will be able to ensure stability and prevent abrupt changes in the economic course.Resistance levels: 0.8920, 0.9050.Support levels: 0.8800, 0.8750, 0.8625.USD/CAD: retail sales in Canada strengthen the loonie rateThe USD/CAD pair continues to develop the bullish trend started the day before, trading around 1.4110 and updating the highs since May 2020.One of the factors behind the strengthening of the US currency was the statements of US President-elect Donald Trump, who reiterated plans to impose additional tariffs on imports from Canada, Mexico and China. This step, according to analysts, may slow down the reduction of interest rates by the US Federal Reserve and lead to an increase in consumer prices. At the same time, the candidate for the post of US Treasury Secretary, Scott Bessent, known for his cautious approach to economic policy, supported the idea of such measures, which strengthened investors' confidence in the consistency of the new administration.The Canadian dollar, despite the pressure from the US currency, receives support from positive macroeconomic statistics. Thus, retail sales excluding cars increased by 0.9% in September against the expected 0.5%, while the overall figure remained at 0.4%, coinciding with forecasts. Chief Economist of CoStar Group Inc. Carl Gomez noted that the Bank of Canada's policy of lowering interest rates probably helped stabilize the housing market, but a recovery in its activity to previous levels remains unlikely. Most mortgage rates depend on the yield of government bonds, and not directly on the decisions of the regulator. Meanwhile, the yield on 10-year government of Canada bonds, a key indicator for long-term rates, remains at 3.5%, despite recent rate cuts to 3.75%.Resistance levels: 1.4145, 1.4200, 1.4250, 1.4300.Support levels: 1.4100, 1.4050, 1.4000, 1.3958.Crude Oil market analysisBrent Crude Oil prices remain under pressure, continuing the correction within the downtrend and trading just above the 72.00 mark. This dynamic was facilitated by the statements of US President-elect Donald Trump, who announced ambitious plans to reform the country's oil and gas sector.Among Trump's key initiatives is the lifting of restrictions on the issuance of export licenses for new facilities related to liquefied natural gas (LNG). These measures were previously introduced by the Joe Biden administration, and their cancellation is expected to stimulate export growth. Also among the proposals of the future president is a reduction in the time frame for approving permits for oil drilling on federal lands and coastal waters of the United States, which now take up to 258 days. The new administration plans to support the expansion of the country's strategic reserves: currently, oil purchases in the reserve range from 3.0—5.0 million barrels per month, but Republicans consider such volumes insufficient and propose to increase them.In addition, Donald Trump intends to review the influence of the International Energy Agency (IEA), seeking to mitigate environmental requirements and reduce lobbying for renewable energy sources. Analysts suggest that even partial implementation of these initiatives will lead to a significant increase in oil production in the United States and strengthen its export positions. This, in turn, will increase pressure on world prices for "black gold", creating new risks for balancing supply and demand in the market.Resistance levels: 74.00, 77.80.Support levels: 71.50, ...
EUR/USD: the Bank of Italy insists on revising interest rate policyThe EUR/USD pair shows mixed dynamics, holding near the 1.0590 level. Trading activity remains elevated, but market participants have not decided on the direction of the trend after the growth recorded at the beginning of the week.Yesterday's macroeconomic statistics from the eurozone failed to provide significant support for the euro, which continues to trade near local highs due to the weakening of the dollar. In October, the core consumer price index in the region increased by 0.2% month-on-month and 2.7% year-on-year, which coincided with market expectations. The broader indicator also increased by 0.3% and 2.0%, respectively. These data indicate that inflation has stabilized at the target level, which causes uncertainty about the future steps of the European Central Bank (ECB). Particular attention was drawn to statements by the head of the Bank of Italy, Fabio Panetta, who advocated lowering interest rates to support an economy on the verge of stagnation. He noted that delay could lead to inflation falling significantly below the target level, which would complicate its recovery with the help of monetary instruments.The US dollar came under pressure after the publication of weak statistics. In October, the number of construction permits fell to 1.325 million after the September value of 1.430 million, and their volume decreased by 0.6% in percentage terms after a decrease of 3.1% a month earlier. The number of construction starts also decreased by 3.1% after a 1.9% decrease in September. However, a positive factor was the dynamics of the Redbook retail sales index, which accelerated from 4.8% to 5.1% in November. On Friday, S&P Global is scheduled to publish November indices of business activity in the manufacturing sector and the service sector in the United States and the eurozone, which may become key factors for the further movement of the pair.Resistance levels: 1.0600, 1.0630, 1.0665, 1.0700.Support levels: 1.0561, 1.0530, 1.0500, 1.0450.AUD/USD: the attention of market participants is focused on the RBA protocolsThe AUD/USD pair shows a corrective decline, trading around 0.6526, while the Australian currency remains positive, and the US dollar continues to weaken.The day before, the minutes of the Reserve Bank of Australia (RBA) meeting on November 5 were published. Representatives of the regulator confirmed that the key challenge for the country's economy is high inflation. Although the overall index shows a decline due to cheaper fuel, core inflation, reflecting long-term trends, continues to grow. According to RBA analysts, it will not return to the target range of 1.0–2.0% before 2026. In the current situation, the growth rate of gross domestic product (GDP) remains low, which necessitates maintaining a restraining monetary policy.The RBA left the key interest rate at 4.35%, stressing that the policy of strict borrowing conditions will remain in place until favorable macroeconomic conditions appear. The agency also pointed out that the transition to lower rates is possible only if there is a stable growth in consumption and a significant deterioration in the labor market situation. Experts believe that the regulator's further steps will depend on the dynamics of domestic demand and the state of global economic relations.Resistance levels: 0.6560, 0.6670.Support levels: 0.6490, 0.6400.Silver market analysisIn morning trading, the XAG/USD pair is holding around 31.16, supported by rising gold prices and statements by representatives of the US Federal Reserve.The US central bank continues to adhere to the strategy of easing monetary policy, planning to reduce the key rate by 25 basis points in December. Such a move could strengthen the position of assets competing with the dollar, especially in the long term. A reduction in the interest rate, according to analysts, will lead to a reduction in the debt burden, which will create conditions for expanding production and increasing consumption of industrial metals. According to the forecasts of the Silver Institute, the demand for this metal will reach 700 million ounces in 2024, which corresponds to an annual increase of more than 7%.On the other hand, data from the CME FedWatch Tool indicates a decrease in the probability of a December rate cut: over the past two weeks, it has decreased from 80% to 58.9%. Against the background of this uncertainty, investors may pay more attention to precious metals, which will potentially lead to an increase in their value closer to the Fed meeting.Resistance levels: 31.70, 33.70.Support levels: 30.70, 28.70.Crude Oil market analysisIn the morning, WTI Crude Oil quotes show multidirectional dynamics, trading around the 69.00 mark. The instrument remains near the local highs reached on November 11, but is under pressure from news about a decrease in the supply of hydrocarbons. The Norwegian company Equinor ASA announced a reduction in production at the largest Western European field Johan Sverdrup due to power outages. In turn, the American Chevron announced a temporary limitation of production capacities at the Tengiz field in Kazakhstan in connection with maintenance.Problems in the Chinese economy continue to have an impact on the oil market. Despite the efforts of the authorities, recovery remains limited, and experts from the International Energy Agency (IEA) predict that in 2024 the global surplus of hydrocarbon supply may exceed 1 million barrels per day. The key role in balancing the market will be played by the further policy of OPEC+ regarding the increase in production volumes.Additional pressure on the quotes was exerted by the report of the American Petroleum Institute (API), published the day before. In the week ending November 15, commercial oil reserves unexpectedly increased by 4,753 million barrels, while analysts had forecast an increase of 0.8 million barrels. Data from the U.S. Energy Information Administration (EIA) is expected to be published today at 17:30 (GMT+2). Preliminary estimates indicate a possible slowdown in stock growth from 2.089 to 0.800 million barrels, which may affect further price dynamics.Resistance levels: 70.00, 71.00, 71.60, 72.17.Support levels: 69.06, 68.15, 67.00, ...
OPEC+ is markedly reducing oil production - in fact, the exporting countries will pump about 1 million barrels less per day. We have written earlier on why this is so.As a result, supply at the market has become lower, so prices have gone up and are approaching $100 per barrel again.What will the U.S. do after the OPEC+ statement?The coming energy crisis and the high inflation it causes are scaring the whole world, but it's the States that are worried the most right now:expensive oil means expensive fuel;it's causing prices of almost all commodities to rise;inflation is going up - the Fed keeps tightening policy;high key interest rates are pushing the U.S. closer to recession;in addition, high fuel prices can cause social discontent.To prevent this, the U.S. is trying to influence the largest oil producers and keep prices down. Otherwise, the Democrats will most likely not win the congressional elections. They are due in a month.The U.S. started to prepare in advance: President Biden flew to Saudi Arabia this summer and persuaded the U.S. to bring down oil prices. But it did not work out very well: OPEC acts in its own way and does not want to listen to Americans. As a result, the failed negotiations with the Saudis have further diminished the credibility of Biden and the Democrats' ability to influence oil, inflation and economic stability in the United States.However, the Biden administration is not giving up; they have a few more options - rather radical ones - on how to lower oil prices.Additional Oil ReleaseThe safest, though least effective, option is to further draw oil from strategic U.S. storage facilities. In response to OPEC+'s decision to cut production, Biden announced that the U.S. would release 10 million barrels of oil, even as storage reserves are depleted.That would be all well and good, but the announcement had little or no effect on oil prices, especially compared to the previous similar decision to release 180 million barrels to the market. No wonder: the volumes are not comparable.In addition, since U.S. storage reserves are running out, there is a risk that they will not be enough for a rainy day: in case of sharp reductions in domestic production (for example, during hurricanes in the Gulf of Mexico) or imports (if OPEC+ countries reduce exports).Reducing military aid to the ArabsDemocrats have drafted a "Tense Partnership" bill in response to OPEC+ and specifically the alliance's leaders, Saudi Arabia and the UAE. They are accused of "a hostile act against the United States" and "siding with Russia in the conflict with Ukraine."As revenge, the U.S. could withdraw its troops from these countries and stop supplying weapons and other military aid to fight neighboring states and terrorists. This includes protecting oil infrastructure from attack.This option also has disadvantages: without U.S. military support in these countries, there could be problems that would inevitably affect the global oil supply. After all, if military actions or terrorist attacks affect the oil fields or storage facilities of Saudi Aramco, oil will cost even more, and such attacks occur quite often.So even if the Saudis and the UAE will not reduce exports in response to the withdrawal of troops and reduction of arms supply, there is a good chance that sooner or later the fighting will make prices go up.In addition, Saudi Arabia has already planned to prepare for a possible conflict with the United States. For example, in the spring the Saudis said they were going to explore ways to move away from the petrodollar - that is, not to use bucks in the black gold trade. In this case, the demand for the dollar could fall dramatically, especially if other oil-exporting countries do the same.NOPEC: Conflict with OPEC+Amid disagreements with OPEC, the U.S. may return to the "oil production and export cartel law," NOPEC, to have more leverage on oil exporters.In this case, U.S. courts will be able to consider antitrust suits against OPEC+ and in general against countries involved in cartel collusion in the oil market. Under the decision of their own courts, the U.S. will be able to impose sanctions, confiscate property of these countries and put pressure on them in other ways. At the same time, the U.S. itself will indicate what is legal and what is not, thus assessing any actions of the countries that regulate oil production and prices.This option also has a disadvantage: sanctions on exporters would also hit the U.S. itself. If oil prices become lower, the U.S. oil industry will also be hard hit: domestic production will decrease and it will have to import more. And since the market is competitive, and the U.S. in this case will be "enemies of OPEC +", they will have to buy oil more expensive.So, even if the U.S. takes a drastic step - provoking a conflict with Saudi Arabia or the UAE, or starting a sanctions war with OPEC+ - all this will have a negative impact on themselves.Can't sanctions be lifted on Venezuela?As we can see, the U.S. has almost no normal options left to influence the oil market. Nevertheless, the U.S. says it is not going to remove sanctions from Venezuela yet, despite the fact that this would help get more oil on the market and lower oil prices. We may see some new rhetoric in this regard, but no change for now.The Iran deal has also been stalled so far: there is no news or movement on it. Although it is possible that disagreements with the Saudis may attract the U.S. to support Iran, because these are the two sides of the Arab conflict.On the one hand, Iranian oil would help to increase supply, but there is a nuance here as well: the reserves in this country are not grandiose, moreover, most of the oil is already exported in circumvention of sanctions.So what to do with Brent and WTI crude oil prices in 2022?If we discard all of the above options, then all we have to do is sit back and watch oil go up in price. The outlook is also bad: even if the world starts a recession and the demand for oil decreases, OPEC+ is already reducing production and adjusting to negative expectations, and also the supply from Russia may decrease if the embargo comes into force.And if that's the case, U.S. inflation will be high. And given the strong labor market, the Fed may raise the rate even more than 1.25% by the end of the year, and it is not certain that it will slow down next year as well. If rates remain high for a long time, the risk of recession in the U.S. is very high, and stocks and cryptocurrencies will have no fuel for growth. As a result, the economy will have a hard time: liquidity is scarce.If the U.S. starts to act sharply, the dollar is at risk: the "oil" countries can give it up to reduce dependence on the United States. But if the U.S. does nothing, tightening Fed policy will keep the dollar very strong - though at the cost of high inflation and recession. 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In 2019, the "sub-sanctioned" Iran began to increase oil supplies in circumvention of sanctions. Mostly tankers went to China and the Mediterranean: Syria and Turkey. And by the beginning of 2022, the fleet for transporting sanctioned Iranian and Venezuelan oil had tripled. It accounted for approximately 400 million barrels per year. And such a "ghost armada" successfully undermines the business of transport companies.Why did Iranian tankers get such a name?Last year, The Mail on Sunday reported: 123 Iranian vessels circumvent sanctions on oil trade. They change their location to GPS and create the appearance that they are anchored at sea, but at this time they are loading/unloading at the port. They also actively forge documents, use flags of different countries, disable identification systems and use front companies. Oil is often loaded onto several vessels and mixed before reaching its destination. This is also the case with "toxic" Russian oil.At the same time, Iran has a whole "underground" financial system for trade bypassing sanctions, writes the WSJ. It includes accounts in foreign banks, intermediary companies outside the country and firms that coordinate prohibited trade. The annual turnover is estimated at tens of billions of dollars.And Iranian banks attract affiliated firms to manage trade under sanctions. They register "daughters" outside the country, become trusted for Iranian traders, and then trade with foreign buyers of Iranian oil in foreign currency through accounts in foreign banks.Will the "Iranian Armada" help Russia?She is already helping her to circumvent sanctions, writes the Daily Mail. The international non-profit organization United Against Nuclear Iran (UANI) accuses the Iranian navy of cooperating with Russian oil companies. Allegedly, Russian oilmen are using "Tehran's black market vessels" to circumvent the export ban. And the US, the EU and the UK are even calling for the formation of a team of "ghostbusters".At least 5 Iranian "ghost armadas" are transporting oil from Russia to China and India, according to UANI. And recently, the WSJ reported that Zamanoil from the UAE was linking Iranian and Russian oil workers. The US Treasury accused her of working with the Russian government and Rosneft on the supply of Iranian oil to Europe.However, at the end of March, Iran denied a "secret offer from Russia" to help it circumvent sanctions in exchange for support in concluding a nuclear deal. And in May, he noted that he could not be a competitor of Russia in the global oil and gas market. The country has its own regular customers, and Iran sells the maximum amount of oil.So officially, Iran does not seem to be planning to use its "army of ghosts" to help for the benefit of Russia, despite the fact that these countries have "converged" before. But then there was no question of an embargo on Russian oil and there was no ban on ship insurance. In the new reality, the actions of the "ghost armada" are quite difficult to ...
The year 2022 on world markets will largely be determined by the tightening of monetary policy in the United States, and the first week of the new year confirmed this. The minutes of the Fed's December meeting published last week showed a significant tightening of the position of the regulator's representatives – Fed members believe that the rate can be raised as early as March, and also see a faster reduction in the balance sheet as appropriate. Representatives of the regulator believe that the current economic conditions are already in many ways conducive to tightening the labor market, some even noted the recovery of the labor market already sufficient for such actions, although the majority still expects further improvement in the labor situation. Against this background, it is worth noting the publication of December labor data in the United States, which came out ambiguous. On the one hand, employment in December increased by only 200 thousand. The Bloomberg consensus forecast assumed an employment growth of 450 thousand, and the actual growth rate of the indicator was the lowest since the beginning of 2021. Nevertheless, in many respects such weak employment growth is explained by seasonal adjustment, and the unemployment rate in December fell more than expected. Thus, the indicator has updated the next lows since the beginning of the pandemic, dropping to 3.90% against the expected 4.10%. The unemployment rate continues to approach a historic low of 3.40%, and labor statistics have further increased fears in the market of an imminent tightening of the PREP in the United States. As a result, on Friday, the yields of ten-year US treasuries at the moment exceeded 1.80% per annum - the maximum since the beginning of the pandemic. Today they have returned to these levels again.This week, the dynamics in the market will continue to be determined by expectations for the actions of regulators - investors will follow the statements of representatives of the Fed and the ECB, as well as the publication of price data in the United States for December. Statistics published last week showed an increase in inflation in the EU to 5.00% YoY. As a result, the topics of price growth in December updated the historical maximum, while analysts expected a slight slowdown in price growth. The situation on the supply side also has high inflation in the United States. The December business activity indices indicated a slight easing of logistical problems, however, the further deterioration of the epidemiological situation again intensified disruptions in logistics chains, which does not lead to a significant slowdown in price growth. The FAO World Food Price index fell in December for the first time since July, but food inflation remains at elevated levels. Against this background, US inflation data is likely to continue to bring the Fed rate hike closer, intensifying the negative in the markets.The main event for the oil market in early 2022 was the OPEC+ meeting. However, as expected, it was decided to stick to the current plan to increase production. Nevertheless, the cartel lowered its forecasts for a surplus in the oil market, which allowed Brent crude futures to exceed the level of $80/bbl. Moreover, against the background of interruptions in the supply of black gold from Kazakhstan and Libya, quotations were close to $83/bbl. However, at the end of the week they declined from these levels, today Brent futures are growing by 0.35% and are trading around $82.05/bbl. The main negative for oil this week may be related to the potential strengthening of the dollar amid expectations of a tightening of the PREP in the United States. However, in the absence of a significant strengthening of the dollar, Brent futures may still exceed the levels of $83/bbl– - the quotes may be supported by another weekly decline in oil ...
Oil is getting more expensive on Friday morning. By 8.25 GMT, the price of a barrel of Brent oil rose to 70 dollars 89 cents, or 1.75%. The price of a barrel of WTI oil rose to 67 dollars 71 cents or 1.22%. According to the results of trading on Thursday, these oil standards rose by 1.2% and 1.4%, respectively. Investors evaluate the results of the last meeting of the countries participating in the OPEC+ agreement. Some market participants expected that the alliance would decide to reduce the volume of oil production. However, OPEC+ retained the current parameters of the deal. This means that the alliance will continue to increase the volume of raw material production by 400,000 b/s every month. At the same time, the participants of the meeting stated that they could make a different decision on the volume of production at any time. Everything will depend on the situation on the oil market and in the global economy. They noted the persistence of uncertainty. It intensified after the appearance of the next coronavirus strain omicron. Investors liked the alliance's statement about the possible holding of an extraordinary meeting, if the situation requires ...
In the last month of summer, the oil exchange rate is likely to show a correctionIn August, the oil price depends on several important factors - first of all, the recovery of the market in the United States and the new flare-up of the conflict in the Middle East. The Israeli authorities have accused Iran of attacking an oil tanker, and the United States and Great Britain have already promised support to Israel. Against this background, the oil exchange rate moved to growth after a short correction, but it is not known how long this recovery growth will be. We offer a traditional analysis of oil prices.Reducing unemployment in the United StatesIn many ways, the positive movement on the US stock markets has a positive effect on the oil exchange rate: the S&P 500 and NASDAQ 100 indices traditionally update historical highs. According to data from the US Department of Labor, the number of applications for unemployment benefits has fallen sharply.During the last week of July, only 385 thousand such appeals were registered, and the total number of recipients of benefits amounted to 3 million people. However, the effect of positive news from the US markets has already been played out, and the dynamics of the oil exchange rate will need new incentives to continue growth.At the same time, macroeconomic statistics from the United States show an increase in the commodity deficit, which increased from $71 billion in May to $75.7 billion in June. This was largely due to a 2.1% increase in imports compared to the previous month, although exports increased by only 0.6%. This is largely due to a reduction in supplies, which in turn restricts production within the United States.There are already reports about how the spread of a new strain of coronavirus can affect the American economy. In particular, as the president of the Federal Reserve Bank of Minneapolis, Neil Kashkari, said, the new strain may slow down the recovery of the labor market. This completely contradicts the recent statement by Fed Chairman Jerome Powell, who assured analysts that the delta strain is not a risk to the American economy.Positive statistics on the labor market may force the Fed to change its approach to monetary policy and increase rates, as well as curtail the quantitative easing program. First of all, this will lead to a strengthening of the dollar, which in turn will affect the commodities denominated in the US currency. In this case, the oil exchange rate will be influenced by another important negative factor. Moreover, investors will begin to withdraw resources from risky assets, and then the Russian and Chinese stock markets will suffer.Already half of the US states have stopped paying increased unemployment benefits, which on the one hand indicates that there is no need for additional incentives, and on the other hand may mean an increase in demand for fuel. However, in any case, the statistics on the labor market in the United States may not be as positive as it may seem at first glance - the number of jobs outside agriculture, on the contrary, turned out to be less than a year earlier. First of all, this was caused by a large number of dismissals in the field of higher education.Read more: The history of Federal Reserve (Fed) and its functionsThe influence of China and RussiaAn increase in oil purchases from China can potentially act as a new incentive for the hydrocarbon market. So, China may soon announce an increase in quotas for the purchase of hydrocarbons. Moreover, it is expected that more oil will be purchased not only by small refineries from China, but also by large Chinese companies.The main seller of oil on the Chinese market is the Arab countries from the Persian Gulf, so first, most likely, prices for Dubai grade oil will rise sharply, and other grades, including the benchmark Brent, will follow it. However, these expectations are contradicted by the increase in the incidence of coronavirus in China - due to lockdowns and restrictive measures, traffic on some of the most important logistics routes is reduced.Moreover, the Chinese authorities have decided to restrict air and rail travel around the country. In the Asian region, the number of infected people has been growing recently. In particular, in Thailand, even new restrictive measures did not help to stop the increase in new cases. Similarly, in Sydney, Australia, the increase in new cases has reached a historic high, and the authorities expect the situation to worsen further.In turn, Russian oil companies are trying to use the OPEC+ deal to get more favorable working conditions inside the country. In particular, they suggested that the government reduce the tax burden on the industry, which in turn will help start the development of hard-to-reach oil. To do this, they proposed to create two new groups of deposits, for which they proposed to reset the tax on mineral extraction.The first group includes areas with the volume of initial reserves of less than 65 million tons and the degree of depletion of less than 1%. The second group includes the deposits of ultra-viscous oil in the Komi Republic. Moreover, the oil companies decided to stimulate the exploration of hard-to-recover reserves. To do this, it is proposed to use a traditional set of tools - tax deductions and reduction of payments for the mineral extraction tax. However, so far the Ministry of Finance is against the initiative, which is not eager to help oil companies and does not plan to change the taxation of the industry until 2023-2024, until the end of the OPEC+ agreement.At the same time, the further deterioration of the pandemic situation in the world may become a deterrent to the growth of oil prices. Recently, in order to combat the spread of a new delta strain of coronavirus, an increasing number of countries have been strengthening restrictive measures on the mobility of the population. Investors are particularly concerned about the situation in China, where domestic air and rail traffic was limited in order to localize outbreaks of the disease, which directly affects the oil exchange rate.Oil price analysisOil futures moved into the negative zone, without reaching the goals of a short-term rebound. These levels are located near the $73.50 and $71.50 marks, which corresponds to the average Bollinger bands on the daily chart. In general, the oil exchange rate is affected by downward pressure, and analysts are increasingly inclined to believe that a correction may occur in the hydrocarbon market in the near future. The support lines are located near the previous lows - around $70.20 and $67.50, according to the technical analysis of oil prices.Read more: What are futures: types, features, advantages and risksIn the first week of August, the dynamics of the oil exchange rate showed a failure-from about $75 to $70 literally from August 2 to 5. The reason for the increase is quite banal - the growth of fuel reserves in the American market, which indicates a decrease in economic activity. According to official data, inventories increased by 3.6 million barrels, while a decrease of 3.9 million barrels was expected. Moreover, analysts are influenced by data on the spread of a new strain of coronavirus in China, the United States and Japan, as well as the associated expectations of new restrictions.The most important factor that positively affects the dynamics of the oil exchange rate remains the growth of tensions in the Middle East. The conflict between Israel on the one hand and Iran and Lebanon on the other threatens the rapid exit of hydrocarbons from the Islamic Republic to foreign markets, as well as generally increases the uncertainty of oil transportation from the Middle East. As a result, literally in one day on August 5, the oil exchange rate recovered to $71 per barrel, and the next day it was already testing the level of $72 per barrel.A new conflict in the Middle East may become a significant factor that is likely to affect the oil price in August. According to Israeli Defense Minister Beni Gantz, his country is ready to start a war against Iran because of a drone strike on an oil tanker. We are talking about the attack on the Mercer Street oil tanker.Officially, the ship belongs to Japan, sails under the flag of Liberia, but it is operated by the Israeli company Zodiac Maritime. According to Gantz, the Islamic Republic has no more than two and a half months to come close to producing nuclear weapons. In this context, the attack on an Israeli tanker becomes part of a large-scale confrontation in the region. If the tension increases, the oil exchange rate may receive additional support.In turn, Israel has already received assistance from its traditional allies - the United States and Great Britain. As British Prime Minister Boris Johnson hastened to say, " Iran must answer for the consequences." In turn, the representative of the Iranian Foreign Ministry, Saeed Khatibzadeh, said that the Islamic Republic is ready to protect its security and national interests. US Secretary of State Anthony Blinken also joined the diplomatic skirmish, saying that Tehran was undoubtedly behind the attack, and the allies would prepare a "collective response" to this attack.Thus, two multidirectional factors: the strengthening of anti-bullying measures and the growing conflict in the Middle East are pushing the trajectory of the oil exchange rate in different directions. If the first factor leads to a reduction in demand, the second one seriously reduces the supply of oil - it is the Middle East conflicts that traditionally push the cost of hydrocarbons up. According to most analysts, the combination of two multidirectional factors can cause the oil exchange rate to fluctuate in a wide range from $68 to $75 per Brent, depending on the news background.Read more: Are the minutes of the Federal Reserve meetings useful for ...
At the morning trading on Tuesday, oil prices are declining. By 7.42 GMT, Brent oil fell to 72 dollars 85 cents per barrel, or by 0.05% compared to the closing price of trading the day before. The price of WTI oil fell to 71 dollars 22 cents per barrel, or 0.06%. Pressure on oil prices is exerted by information about the deterioration of the epidemiological situation in Asian countries. In this region, there is an increase in the number of infections with a new strain of coronavirus infection "delta". The authorities of a number of Asian countries were forced to tighten restrictive measures, including on movement. Analysts at Commonwealth Bank Of Australia note that the spread of the delta strain around the world will become a serious threat to the recovery of oil demand. Mobility restrictions are already being observed in some parts of the Asian region. This is the reason for the fall in oil demand. More than 60% of the world's oil consumption is accounted for by ...
Oil quotations are rising amid expectations of a further recovery in demand. International Energy Agency forecasts oil demand to be higher than before the pandemic by the end of 2022.The price of Brent crude futures on the ICE London exchange has surpassed $73 in August, trading data shows. It peaked at $73.07 during the trading session - the last time Brent traded above $73 a barrel was on 20 May 2019.WTI Texas Intermediate crude futures are up 1.22% to $71.15 in July.The International Energy Agency (IEA) today published The IEA Oil Market Report (OMR), which said that oil demand will return to pre-crisis levels by the end of 2022. At the same time, the organization kept the demand forecast for 2021 at 5.4 million barrels per day.Read more: The International Energy Agency (IEA) - brief history and activityOPEC+ member countries will have reserves of around 6.9m bpd between May and July. And if sanctions on Iran are lifted, market supply would increase by 1.4m bpd in the short term.The price of Brent crude oil has been in an uptrend since May 21. During this period it rose from $64.5 to $73, and there were only two trading sessions which closed lower.The IEA stressed that OPEC+ countries will have to increase production to meet rising market demand. Bloomberg points out that road traffic in the US and most of Europe has recovered to pre-pandemic levels.At the same time, the full recovery of flights, and with them, demand for jet fuel remains in doubt, says Investec Bank's head of commodity markets, Collum McPherson. The return of Iranian oil to the market, he believes, will be a challenge for OPEC+ if demand does not pick ...
In international markets, the price of Brent crude oil in April of this year averaged $65, which did not change compared to the average value for March. According to the US Energy Short-term forecast (EIA), published on May 11, 2021, they are projected to average $65 per barrel in the second quarter of 2021, and then an average of 61 per barrel in the second half of 2021, therefore, a correction is expected to develop.Brent crude oil prices were high in 2020, averaging $64 a barrel in January. But they fell sharply in the second quarter, closing at about $9 a barrel in April 2020, when the price of West Texas Intermediate (WTI) crude oil fell to a negative price around -37 dollars a barrel.By June 2020, the price of Brent crude oil exceeded $40 per barrel, and by the end of 2020, it rose to $50 per barrel. In March and April 2021, prices rose to $65 per barrel due to rising oil demand due to an increase in the number of vaccinations and an increase in overall economic activity worldwide.The price increase also reflects supply constraints from the Organization of the Petroleum Exporting Countries (OPEC) and OPEC partner countries. OPEC restricts oil production due to lower demand during the pandemic. At its meeting in April 2021, OPEC announced that it would start increasing oil production, with each adjustment being no more than 0.5 million barrels per day.According to the EIA forecasts, the average price of WTI oil in 2021 will be $59 per barrel, and in 2022 oil will be at the level of $57 per barrel.Four reasons for volatile oil pricesPreviously, oil prices had predictable seasonal fluctuations. They rose sharply in price in the spring, as oil traders expect high demand for cars for the summer holidays. When demand peaks, prices fall in the fall and winter, especially if the winter is warm.Oil prices have become unstable due to factors affecting oil prices. The coronavirus pandemic has led to a sharp drop in oil demand. This offset three other factors affecting oil prices: rising U.S. oil production, declining OPEC influence, and a stronger dollar.Slowing global demandThe EIA estimates that global demand for oil and liquid fuels in 2020 was 92.2 million barrels per day. This is 9 million barrels per day lower than in 2019. Demand is expected to grow by 5.4 million barrels per day in 2021 and another 3.7 million barrels per day in 2022.US oil production growthProducers of shale gas and alternative fuels such as ethanol in the US have increased their supply. They slowly increased the supply, maintaining prices high enough to cover the cost of developing new fields. Many shale gas producers have become more efficient at extracting oil. They found ways to keep the fields open, saving on the cost of closing them. This growth began in 2015 and has since affected supply.In August 2018, the United States became the world's largest oil producer. In September 2019, U.S. crude oil production rose to a record 12.1 million barrels per day. For the first time since 1973, the US exported more oil. In February 2021, U.S. crude oil production averaged 9.9 million barrels per day, down 1.2 million barrels per day from January. The EIA estimates that U.S. crude oil production rose to 10.9 million bpd in March and nearly 11.0 million bpd in April.U.S. crude oil production is estimated to average 11.3 million barrels per day in the fourth quarter of 2021 and increase to 11.8 million barrels per day in 2022.Reducing the influence of OPECAmerican shale oil producers have become more powerful, but they don't act like an OPEC-type cartel. To maintain market share, OPEC did not cut production enough to set a minimum price level.OPEC's leader, Saudi Arabia, wants higher oil prices because it is a source of government revenue. But it must balance this with the loss of market share to American and Russian companies.Saudi Arabia does not want to lose market share to its main rival, Shiite – led Iran. The 2015 nuclear peace Treaty lifted 2010 economic sanctions and allowed Saudi Arabia's biggest rival to export oil again in 2016. But that source dried up when President Donald Trump reimposed sanctions in 2018.The rise in the value of the dollarCurrency traders have been raising the value of the dollar since 2014. Many traders use the dollar as a safe investment in times of economic uncertainty. For example, the value of the dollar rose by 30% between 2013 and 2016 in response to the Greek debt crisis and Brexit. From March 3 to March 23, 2020, it grew by 8.4% due to the coronavirus pandemic.All oil transactions are paid in US dollars. Most oil-exporting countries link their currencies to the dollar. As a result, a 25% rise in the dollar offsets a 25% drop in oil prices. Global economic uncertainty keeps the US dollar strong.Brent oil price forecast for 2021 and 2022On the weekly oil chart, a large bullish "Wolf Wave" model was formed with the aim of working out the model at the level of $120 per barrel. As we can see, the potential for continued growth is still there. Moving averages indicate the presence of a short-term bullish trend in oil. Prices broke through the area between the signal lines up, which indicates pressure from buyers of "Black Gold" and the potential continuation of the growth of the asset value from the current levels. At the moment, we should expect an attempt to develop a correction and test the support level near the area of $68.50 per barrel. Further, the continuation of the growth of the oil exchange rate in the region above the level of $ 85 per barrel in 2021 and $ 120 in 2022.Read more: How to determine the beginning of the movement of the "bull" market?An additional signal in favor of the rise in quotations and prices for Brent oil will be a test of the support line on the relative strength indicator (RSI). The second signal will be a rebound from the lower border of the inverted "Head and Shoulders" reversal pattern. Confirmation of the rise in quotations will be the breakdown of the resistance level and the closing of Brent prices above the level of 70.55, as we can see, buyers can not break through this area in any way.Thus, the Brent forecast for oil prices for 2021 and 2022 suggests an attempt to develop a correction and test the support level near the area of 68.50. Further, the continuation of growth with a goal above the level of $85 per barrel in 2021 and $ 120 in 2022. A test of the trend line on the relative strength indicator, as well as the formation of a large inverted "Head and Shoulders" model, will be in favor of the rise.Oil price forecast for 2025 and 2050The EIA predicted that by 2025, the nominal price of Brent crude oil will rise to $66 per barrel.By 2030, it is expected that global demand will lead to an increase in the price of Brent crude oil to $89 per barrel. By 2040, prices are projected at $132 per barrel. By then, the sources of cheap oil will be exhausted, which will make oil production more expensive. By 2050, oil prices will be $185 per barrel, according to the EIA's Annual Energy Outlook.The EIA expects oil demand to stabilize as utilities rely more on natural gas and renewable energy sources. It is also assumed that economic growth averages about 2% per year, while energy consumption is declining by 0.4% per year. The EIA also has forecasts for other possible scenarios.Can oil cost $200 a barrel?Although it seems ridiculous now, there are situations in which the price of oil can reach $200 per barrel. The EIA forecasts Brent crude prices at $185 a barrel in 2050 if the cost of oil production falls and it displaces competing energy sources, but economic conditions could lead to even more price increases.In July 2008, oil prices reached a record high of about $147 per barrel. In December, they fell to about $40 per barrel, and then rose to $123 per barrel in April 2011. The Organization for Economic Cooperation and Development (OECD) previously predicted that the price of Brent crude could rise to $270 a barrel on rapidly growing demand from China and other emerging markets.The price of oil at the level of $200 per barrel can change consumer consumption. The use of oil as an energy source has led to climate change. There is an opinion that high oil prices lead to a "drop in demand". If high prices persist long enough, people change their buying habits. The drop in demand occurred after the 1979 oil shock. Oil prices have been falling steadily for years.The $200-a-barrel oil price forecast seems disastrous for the American way of life, but people in Europe have been paying high prices for years because of high taxes. As long as people have time to adjust, they will find ways to live with higher oil ...