Brent Oil: Continuing To Decline

After sliding steeply through the charts recently, Brent Oil found some support around $77.50 last week. Speculation regarding major central banks easing monetary policy further to stimulate its economy encouraged Brent Oil to advance above $78 with Brent moving as high as $81.58 following Friday’s rate cut from the People’s Bank of China (PBoC). In regards towards why monetary easing would increase an upturn in valuation, the moves from the central banks are widely seen as decisions to reinvigorate the global economy, which in turn should lead to increased demand for Oil.

Looking ahead, investors will be solely concentrating on the outcome of Thursday’s OPEC meeting before determining which direction Brent Oil will trade next. If a major oil producer indicates that it would be willing to reduce its oil production, it would represent an opportunity for Brent to either continue consolidating around $80, or progress further. Whether Brent Oil could progress further would really be dependent on who is willing to cut supply, and for what duration.

However if the outcome to the OPEC meeting indicates no major producer is willing to cut supply, it would pressure the oil markets and likely lead to a return below $80.


Disclaimer: The content in this article comprises personal opinions and ideas and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime Ltd, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same. There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.