empty
08.04.2020 09:07 AM
Positive result from OPEC + meeting will lead to the continuation of increase in oil prices (a decline in USD/CAD and USD/NOK pairs is expected)

Prices of crude oil received support after last week's strong growth, following directly the reports from D. Trump who said that Saudi Arabia could begin to lower the production of crude oil by 10 million barrels per day.

It seems that last week has become a reversal for oil prices. Growing hopes that Saudi Arabia, Russia and the US will still begin negotiations on the regulation of crude oil production, while maintaining quotes. On Thursday, OPEC + will meet in a video conference mode at which this issue will be discussed. So far, it is expected that a decision will be made on it to reduce oil production by 10 million barrels per day.

The question arises here: will it be enough to contribute to higher prices?

In our view, the dynamics of oil prices will depend not only on the volume of reduction adopted at the meeting, but also on the situation of the impact of coronavirus on the global economy. Locally, prices at the end of the meeting may receive significant support on Thursday, if the meeting decides to reduce production by more than 10 million barrels per day, and the implementation time will exceed the forecasted three months.and the implementation period will exceed the projected three months. At the same time, if it turns out to be less in volume and terms no more than three months, and other producers of crude oil – the United States, Brazil or Canada refuse to participate in this process, we should expect a continuation of a strong fall in quotes.

Another limiting factor for prices is the entry of the global economy into recession amid the coronavirus pandemic. Slowing economic growth automatically leads to a drop in demand for raw materials and commodity assets - industrial metals and, of course, oil. We believe that the main task facing oil producers is to bring prices back to $ 60 per barrel, and keep them in the range of $ 30–40 per barrel so that they do not collapse below the $ 20 mark, which will lead to the collapse not only in sale, but also oil producers in the traditional way.

Of course, if everything is positive on Thursday, this could serve as a good incentive to continue to cautiously strengthen commodity currencies against the US dollar. At this wave, shares of mining and energy companies will also receive support.

Forecast of the day:

The USD/CAD pair is consolidating above the level of 1.3990 expecting the result of the OPEC + meeting. If it ends positively, the pair will resume a local decline. In this case, we expect it to declinel to the level of 1.3920, and then to 1.3725, if the level of 1.3990 is broken down.

The USD/NOK pair is also consolidating only above the level of 10.1500. If the result of the OPEC + video conference is positive, then we should expect its decline to the level of 9.8650.

This image is no longer relevant

This image is no longer relevant

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

April to play crucial role in Europe's gas future

Europe's gas sector is entering a critical phase, as the end of the heating season sets the stage for refilling storage facilities, which are now two-thirds empty after the winter

Miroslaw Bawulski 13:01 2025-03-31 UTC+2

WTI – West Texas Intermediate. Prices Lack Support for Growth

West Texas Intermediate (WTI) crude oil prices are attempting to attract buyers, but the market remains in a state of uncertainty. Concerns over President Trump's aggressive trade tariffs are putting

Irina Yanina 12:39 2025-03-31 UTC+2

EUR/USD. Analysis and Forecast

At the start of the new week during the Asian session, the EUR/USD pair attempted to attract buyers, but this was unsuccessful. The euro received support from easing concerns about

Irina Yanina 12:35 2025-03-31 UTC+2

US stock market runs into trouble

Rumors about mutual tariffs and another blow to consumer confidence triggered the second-worst sell-off of the S&P 500 this year. Investors are still holding piles of US stocks

Marek Petkovich 10:58 2025-03-31 UTC+2

EUR/USD. Hello, April: Eurozone Inflation Report, ISM Indices, and Nonfarm Payrolls

The first week of every month is the most informative for EUR/USD traders. The economic calendar traditionally includes a report on inflation growth in the eurozone, American ISM indices

Irina Manzenko 06:28 2025-03-31 UTC+2

GBP/USD Pair Overview – March 31: Nonfarm Payrolls, Trump, and Unemployment May Create New Problems for the Dollar

The GBP/USD currency pair continued to trade sideways near its highs on Friday. This sideways movement has persisted for several weeks, and the British pound has not managed even

Paolo Greco 06:24 2025-03-31 UTC+2

EUR/USD Pair Overview – March 31: A New Week of Trials for the Dollar

The EUR/USD currency pair rose again on Friday. As we can see, the correction against the upward trend of recent weeks ended very quickly. But that's no surprise, given that

Paolo Greco 06:24 2025-03-31 UTC+2

What to Pay Attention to on March 31? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic events scheduled for Monday. The only somewhat interesting reports will come from Germany. Retail sales and inflation data for March will be released. However, we'd

Paolo Greco 03:21 2025-03-31 UTC+2

AUD/USD: Analysis and Forecast

The AUD/USD pair continues its sideways consolidation, remaining within a familiar range near the key psychological level of 0.6300. This movement is driven by several factors impacting global market sentiment

Irina Yanina 11:16 2025-03-28 UTC+2

EUR/USD. Analysis and Forecast

Today, the EUR/USD pair is consolidating near the key psychological level of 1.0800, showing no intention of retreating below 1.0780 as traders and investors await the release of the U.S

Irina Yanina 10:45 2025-03-28 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.