USOil, H4
USOil pulled back from one-week highs of $54.74, dipping briefly under $54.00 to $53.97 before heading back over $54.35 into the US open. The contract has recovered from last week’s near five-month low of $50.60, helped by the apparent cancellation of US tariffs on Mexican goods, and prospects for the extension of OPEC production cuts through year end. Russia is the only major producer not yet agreeing to maintaining output caps, with reports saying it is concerned that it would lose market share to the likes of the US if it maintained lower output. The easing of trade tensions may put a floor under oil prices for now, though the market will pay keen attention to Russia in the coming days and weeks ahead of the key meetings in Vienna.
The Russian tones remain conciliatory but as ever the picture remains complicated. One on hand there is the situation in Libya and the ongoing crisis in Venezuela support prices along with the OPEC production cuts, however weakening global demand from the ongoing trade tensions continues to constrain demand. June 25-26 is the 176th Meeting of the OPEC and non-OPEC Conference and a key week as the US driving season begins increasing demand for US gasoline.
Stuart Cowell
Head Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
