Although the oil bulls attempted to use the news regarding a Saudi Arabian led coalition launching airstrikes in Yemen as a reason to push oil prices higher, the commodity has now erased all of its gains and this has not surprised me. Yemen was previously only seen as the 39th largest producer of oil, therefore the sudden gains we encountered late last week were always linked to a hypothetical situation that if other nations became involved in the on-going conflict it might disrupt oil production elsewhere. The keyword here is hypothetical, and there would really need to be evidence of oil production slowing for traders to become more interested.
Right now, there are no indications at all that the coalition-led airstrikes are going to disrupt oil production and this has contributed to the gains being erased.
The other major contributor to the oil markets commencing the week with a bearish momentum is that it appears negotiations on whether to relax nuclear sanctions against Iran are reaching the final stages, which could lead to a further one million barrels a day being pumped into the markets. Such increased inventories would pressure the already aggressive oversupply by around a third, and provide more than enough reason for the bears to squash oil prices lower.
Comparebroker is a comparison site and we spend hundreds of hours to keep the information up to date. However, users are advised to do their own due diligence and nothing can be perceived any advise. The content on the website is purely for education purposes only
Recommended Content
Editors’ Picks
AUD/USD stalls ahead of Reserve Bank of Australia’s decision
The Australian Dollar registered minuscule gains compared to the US Dollar as traders braced for the Reserve Bank of Australia monetary policy meeting. A scarce economic docket in the United States and a bank holiday in the UK were the main drivers behind the “anemic” AUD/USD price action. The pair trades around 0.6624.
EUR/USD propped up near 1.0750 ahead of European Retail Sales
EUR/USD churned around 1.0770 to kick off the new trading week, with the pair rising after better-than-expected Purchasing Managers Index figures early Monday before settling into familiar chart territory above 1.0750 ahead of Tuesday’s pan-European Retail Sales figures.
Gold rises as US job slowdown dampens Treasury yields
Gold price rallied close to 1% on Monday, late in the North American session, bolstered by an improvement in risk appetite due to increased bets that the US Federal Reserve might begin to ease policy sooner than foreseen. The XAU/USD trades at around $2,320 after bouncing off daily lows of $2,291.
Ethereum traders show uncertainty following huge whale sale, Robinhood Crypto Wells notice
Ethereum holdings on centralized exchanges continue to decline despite recent whale sales. With Robinhood Crypto as the latest recipient of the SEC's Wells notice, Ethereum spot ETFs look more unlikely.
RBA expected to leave key interest rate on hold as inflation lingers
Interest rate in Australia will likely stay unchanged at 4.35%. Reserve Bank of Australia Governor Michele Bullock to keep her options open. Australian Dollar bullish case to be supported by a hawkish RBA.