The oil prices is trading higher in today’s trading session after a report showed that Members of Opec cut the oil output dramatically for the month of January.
The oil cartel announced towards the end of last year they would reduce production to stem the slide in oil prices which has been in free fall and threatened to break below the $50 a barrel mark.
The cuts should ensure for now, that Oil will stay above the $50 mark
OPEC+ has been successful in cutting back production since its peak production in November last year [and] the Brent market has thus firmed up,” said Bjarne Schieldrop, head of commodity strategy at SEB Markets.
Staying above $50 is one thing, but continuing to rally is another,and some in the market think that this may be a tall order considering the amount of oil coming out of the US.
As long as the country continues to release such vat amounts of oil to the market, any major rally in oil may not be forth coming or may be some way off.
“U.S. production is on pace to average 13 million barrels per day in 2020, which puts the nation on track to set a new production record for a third consecutive year,” said EIA Administrator Linda Capuano, in a statement.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.|