Oil: Weakening macro backdrop – ANZ

Sandeep Kanihama FXStreet Contributor

According to ANZ analysts, crude oil market faces an important decision point, as OPEC and its allies meet to review OPEC’s oil production strategy and the weakening macro backdrop is further complicated by changes in Saudi Arabia’s ministerial responsibilities.

Key Quotes

“The surprise replacement of Saudi Arabia’s Energy Minister, Khalid Al-Falih, with Prince Abdulaziz al Salman raises questions about the kingdom’s oil policy. We don’t see the move as a prelude to significant change. The prince is a long time energy ministry official and has been part of the Saudi delegation that has set the OPEC production policy.”

“As OPEC and its allied producers (such as Russia) meet in Abu Dhabi, they face unprecedented uncertainty. In particular, tension between the US and Iran/Venezuela continues to impact the market.”

“We have subsequently reduced our forecast oil demand growth to 1mb/d this year (from 1.2mb/d). Even so, we see sizeable stock drawdowns in Q4.”

“With crude oil well below Saudi Arabia’s target of USD80/bbl, we feel they have no choice but to continue the current production cut agreement to help support current prices. However, the ability to push prices higher looks limited.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD holds firm near 1.1850 amid USD weakness

EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold remains supported by China's buying and USD weakness as traders eye US data

Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.