Crude oil futures rose on Friday as market focussed on OPEC oil output. The OPEC crude oil production in September decreased by 0.05 mb/d, (m-o-m), to average 24.11 mb/d, according to secondary sources. OPEC said it believes that the worst of current crisis is over. Oil market also benefitted from falling US Crude oil inventories and WTI Crude closed flat just above $41 per barrel.
The IMF noted in its latest World Economic Outlook last week that crude oil prices declined by 60% between February and April 2020 as the pandemic led to a collapse in global oil demand and concerns about storage capacity. IMF said that thanks to supply reductions, from late April onward, oil prices recovered from the mid-$10s to more than $40 a barrel by early June, but into August they remained about $25 below early January prices. As a result, many oil firms have suffered large losses massive layoffs, and asset write-downs as they reassess price outlooks and investments.
Oil prices edged up in early Asian trade on Monday ahead of China’s economic growth data, which is expected to show recovery in the top oil importer, offsetting concerns of an impact from the virus’ resurgence on consumption and rising supply. China will release third-quarter GDP data; its economy most likely grew 5.2% in July-September from a year earlier, as consumers resurfaced and major trading partners reopened for business, shaking off a record slump seen earlier this year. However, China’s oil-buying frenzy is expected to slow in the fourth quarter amid high inventories and limited import quotas for independent refiners. The Joint Technical Committee fear a prolonged second wave of the COVID-19 pandemic and a jump in Libyan output could push the oil market into surplus next year in its worst-case scenario, according to a confidential document seen by Reuters. Such a surplus could threaten plans by OPEC, Russia and allies, known as OPEC+, to taper record output cuts made this year by adding 2 million barrels per day of oil to the market in 2021
TREND : BULLISH
Time : 19/10/2020
Pivot : 40.79
Technical View : LONG ABOVE 40.99
Target : 41.14, 41.32, 41.52, 41.81
Technical View : SHORT BELOW 40.59
Target : 40.39, 40.26, 39.98, 39.71