Oil Price Fundamental Daily Forecast – Demand Concerns Outweighing Supply Worries

We’re looking for a sideways to lower trade on Tuesday with the fundamentals basically neutralized by the combination of potentially bullish and bearish scenarios taking place at this time.
James Hyerczyk
Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading mixed on Tuesday, but primarily rangebound. In a flip of the recent trend, WTI is outperforming Brent today. This move was even more evident on Monday when WTI finished higher and Brent closed lower. Renewed tensions over U.S.-China trade relations are helping to keep prices from pushing higher.

At 08:47 GMT, July WTI crude oil is trading $63.35, up $0.14 or +0.22% and August Brent crude oil is at $71.10, down $0.06 or -0.08%.

Although there were comments on Sunday from the Saudi’s regarding the extension of production cuts beyond June, for the most part, OPEC and its allies have remained quiet.

Citigroup Inc. analysts wrote in a report, “OPEC+ is staying on the sidelines for now, reluctant to add significant volumes to markets so long as overall measures of inventories remain apparently adequate.” The bank is “cautiously optimistic a trade war will result in at least an interim trade deal this year.”

Supply Cut Extension Bullish

The OPEC-led supply cuts have been the primary driver of this year’s rally. So the possible extension of the production curbs could be the catalyst that triggers a resumption of the move. However, since the coalition is not scheduled to meet until the end of June, WTI and Brent prices could flounder for another month.

Involuntary Output Cuts Have Been Neutralized

The U.S. sanctions on Iran and Venezuela and the rising tensions in the Middle East have also been supportive for prices, but the stalemate in U.S.-China trade negotiations have been keeping gains in check because of worries over a global economic slowdown, which could lead to lower future demand.

Daily Forecast

We’re looking for a sideways to lower trade on Tuesday with the fundamentals basically neutralized by the combination of potentially bullish and bearish scenarios taking place at this time.

There is hope for the bulls, however, but this is unlikely to rear its head until OPEC and its allies meet late month.

Over the week-end, oil ministers from Saudi Arabia and other OPEC producers said at their meeting in Jeddah that they were inclined to extend the production cuts into the second half of 2019. Saudi Arabia’s Al-Falih even said the market is still fragile, while suggesting he is open to relaxing the cuts.

Late Tuesday at 20:30 GMT, traders will get the opportunity to react to the weekly American Petroleum Institute’s inventories report. This report is important because of increasing concerns over rising stockpiles and production.

Finally, heightened tensions over U.S.-China and U.S-Iran relations, remain the wildcards.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US