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Oil sees sharp recovery, Saudi economy under pressure

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 23, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - Oil prices saw a miraculous recovery off lows largely due to chart driven factors rather than fundamental news, although chatter of Saudi under pressure to cut production has started doing the rounds.

    As of now, the WTI Jan futures are up 43 cents or 1% at USD 42.33/barrel. Brent futures are up 78 cents or 1.6% at USD 45.33/barrel. Prices were down more than 1% earlier today due to oversupply concerns, bearish forecasts from banks and OPEC officials and also due to broader commodity sell-off.

    Venezuelan oil minister Eulogio del Pino said on Sunday that OPEC cannot allow an oil price war and must take action to stabilise the crude market soon. Oil prices could go to “Mid-20s” in 2016 if OPEC doesn't change its policy, he said.

    Meanwhile, Michele Della Vigna from Goldman Sachs told the Today programme on BBC's Radio 4 that oil could fall to as little as USD 20/barrel, but mentioned only 15% probability of such a drop.

    Prices may have found support from the Bloomberg report that Saudi economy may be forced to cut production or let go the currency peg.
    For more information, read our latest forex news.
     

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