There has been a massive confusion in the energy field from the very beginning of the year since most of the leading oil producing countries were not limiting their current rate in the production of oil. However, the price of oil found a solid ground in the global economy prior to the closing of the year 2016 where OPEC put a cap in the production of oil to limit the oversupply problem of oil in the global market. Most of the leading oil investors made a decent profit during that event and the price of oil rallied significantly higher in the global market due to cap in the oil production line. Such a drastic event from the OPEC was not seen since 2008 by the global market and most of the leading oil producing countries appreciated OPEC decision regarding this restrictions. However, in the last week, the price of oil bounced back in the global market after hitting a critical support level in the global economy and most of the leading oil investors are thinking that this might be the starting of another short-term bullish rally in the price of oil in the global economy.
Extension in oil cap production: In the recent days both OPEC and non-OPEC said a solid statement in the global market that they are joining the extend cap program in the production line of oil for another six months to stabilize the energy field to a great extent. If we get stability in the energy field then cfd trading will be extremely profitable in near future. However, some of leading bodies protested to the joint committee but after verbal discussion, all agreed to this statement since it will have a strong positive impact on the oil market in near future. However, the leading oil investors are still on the sideline as there will be a revision of this statement in the month of April as some of the leading technical group of the joint committee appealed for adjustment in the month of April so that they can take a better decision by seeing the upcoming week performance of the oil industry. However, some of the leading oil analysts are suggesting that this might create another short-term bearish pressure in the oil market since a delay in finalizing the oil cap extension decision will intensify the current oversupply problem of oil in the global market. But most of the optimistic oil investors are now ready to the buy the oil in the deep since the market is most likely to rally higher in the near term future as OPEC is going to extend the current cap in the oil production for another six months.
Leading oil producer’s sentiment: Some of the leading oil producing countries like Saudi Arabia and Kuwait has already appreciated OPEC extension program and they have stated that this was extremely a good decision to bring stability in the energy sector. Leading oil producing country like Russia has also stated that they will cut their oil production by 1.8 million barrels per day but this was supposed to be done by the half of this year. However, if they manage to cut their current production to 1.8 million barrels than we will see a strong ground in the oil price since the supply line will fall to a certain extent in the global market. In the eyes of trained professional if most of the leading oil producing countries in the global market keep their promises then we might see a new long-term bullish trend in the price of oil and cfd trading will be comparatively safe. According to the oil minister committee, the price of oil is most likely to rally higher in the global market as they will take care all the sides in the global economy to limit the ongoing oversupply problem of oil in the global market. Considering this statement the overall sentiment of the oil market has turned bullish in the longer time frame despite the current oversupply problem.
The concern of the traders: Most of the conservative traders in the global market is now concern about the rising number of oil rigs in the economy. In the last year the number of active oil rigs in the U.S economy was only 12 but within the time frame of 12 months, the active number of oil rigs in the U.S economy is now more the 623.If the U.S government started producing oil on a large scale then we might see another bearish threat in the oil industry and cfd trading will be extremely difficult. However, the U.S government has already stated that they are going to limit their current production oil and will actively participate in the oil cap extended program. On the other had the Russian government has already stated that they will limit their current production of oil more the 3 million barrels per day to bring stability in the energy field. To be precise the overall approach from all the leading oil producing countries is extremely positive so far in the global market.
Summary: The price of oil has surged higher in the global market in the last week and most of the professional traders are thinking that it will resume its bullish movements in the global markets in the upcoming weeks. And most importantly OPEC is going to extend the current cap production for another six-month which is extremely positive news for the oil bulls in the global market.