Brent crude and US crude trending points
- Brent crude rose above $51 on Wednesday, the 26thof December, as OPEC and non-OPEC led output cut is expected to take control next week
- US crude surged to $44.33, up by 0.75 cent, as the price slide to 2017 lows seemed to lose momentum
- Tightening supply appeared to have taken control of sluggish demand, as a break above $55 for UK crude seemed likely next week.
Crude crawling upward on tightening market supply
Crude oil had been caught up in the broad-spectrum financial market weakness, as a vivacious gain seemed to unlikely, until later part of quarter 1, next year, amid higher US interest rates, US government shutdown and US-China trade disputes.Investors appeared to lose optimism over Crude, as there had been execrable worries and unnerving perceptions on overall global growth. As a global growth usually triggers the response of a higher oil demand, a much-higher than usual lag in the demand line, seemed to block the supply chain, which is affecting the Crude market markedly.However, on Wednesday, the 26thof December, on the post-Christmas session, there had been a slight sign of shine over the crude shrine, as death-crossed crudes seemed to be awakening. The Brent crude or UK crude indicated the early response, as it was experiencing a vitative gain, while residing at $52.91, during the preparation of this report (the 26thof December, GMT. 15.00).
However, earlier on Wednesday, it plunged to $49.93, its lowest level since July 2017, which appeared to be a result of lack of liquidity, because of a marked absent of investors in the post-holiday session. Meanwhile, markets were closed all over the world including Germany, France and Spain on Wednesday.
The US crude seemed to be holding an upright position, as it is prodding to break above $45 region, and while preparing this report, the US crude was up by $1.75 and residing at $45.01.
US Crude daily chart
Brent Crude daily chart
As multiple analysts had been quoted saying that, the latest leg of crude crumbling had been linked to the global market fears and the fear seemed to be related with liquidity, investors lost faith over the comments of bank and government officials and the early part of the month had experienced a much bumpier ride than anticipated.
However, the OPEC led tightening of crude supply seemed to have taken control of a market, which is lagging demand significantly on the fear of global-scale slowdown, declined demand and a higher recession risk in 2019.
While the OPEC and non-OPEC agreed output-cut is going to take place from January 1st, next week could jolt a jumpstart for both US and UK crude and market had been chattering about slight decline of US oil inventory, although the truth of which hasn’t been verified yet.
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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]