Several events may now overlap with oil prices, which seem to be rising to around USD 36 per barrel. This level has been unseen since the beginning of March, when talks between Russia and Saudi Arabia on cutting production in response to the fall in demand associated with the spreading epidemic broke up.
At present, oil has made up a significant part of the losses, having had the best month in recent history (if we are talking about a percentage increase in price). Currently, oil prices seem to have risen to almost USD 36 per barrel of WTI and to almost USD 39 per barrel of Brent.
Factors for rising oil prices
The market expects OPEC and its allies to postpone the current production cuts beyond the end of June. Information coming to the market shows that Saudi Arabia and Russia are considering extending the cuts to July or even August.
The Genscape report published on Monday showed that oil stocks in Cushing, Oklahoma, fell to 54.3 million barrels last week. Meanwhile, protests in the US about police brutality and growing tensions between the US and China may also drive up oil prices in global markets. In addition, the US dollar has recently shown signs of weakness. This may also mean more expensive oil settled in USD.
The exchanges do not see riots?
Meanwhile, the stock market is still calm. It seems that currently nothing could stop the demand for shares. Even the possibility of sending the National Guard to the streets of New York or sending troops, as Trump mentioned, to suppress the rebellion in American cities. Neither Wall Street nor the VIX fear index reacts to these extraordinary events. In turn, the indices in Europe seem to be further upwards in hopes of a global economic recovery after the recent PMI readings.
Particular attention should again be paid to the Japanese index Nikkei 225 (JP225 on the Conotoxia platform), which we mentioned in our previous comments. Here the rally continues with the greatest strength. The Nikkei 225 on Tuesday increased by another 1.19 percent. In total, the index has increased by almost 40 percent since the March low.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
