Crude Oil weekly special report based On 1.00 Lot Calculation:
SUPPLY EXPECTATION:
- BREAKING NEWS (FEBRUARY 10): RUSSIA ADMITS THEY MAY HAVE TO CUT THEIR OIL PRODUCTION UP TO 700,0000 BARRELS A DAY SOON. Russia cited ongoing sanctions as the main reason why would they reduce oil production. The International Energy Agency still believes that Russia may have to cut oil production up to 2 million barrels by the end of Q1 of 2023.
- EVENT (FEBRUARY 3): THE G-7 GROUP AND THE EU AGREED ON FRIDAY (FEBRUARY 3) TO SET PRICE CAPS ON RUSSIA OIL PRODUCTS. The European Commission agreed that from Feb. 5 the EU should apply a price cap of $100 (Currently moves between $90 and $113) per barrel on premium Russian oil products such as diesel and a $45 cap per barrel on discounted products such as fuel oil.
- EVENT (FEBRUARY 5, 2023): EU BAN ON RUSSIAN OIL PRODUCT (DIESEL, NAPHTA) IMPORTS TO START TAKING PLACE. The EU has already banned 90% crude oil imports from Russia on December 5, 2022. In addition, the US and their allies are considering implementing price caps on Russia petroleum product exports. The plan is to impose caps on high- value exports such as DIESEL, and another on low- value exports such as fuel oil. Sanctions are still expected to cut Russian oil production by 2 million barrels a day in Q1 of 2023, according to the International Energy Agency.
- EVENT (DECEMBER 5, 2022): G-7 GROUP AND THE E.U. PRICE CAP ($60) HAS STARTED TAKING PLACE: The G7 (Group of Seven) consists of the UK, US, Canada, France, Germany, Italy and Japan. The introduction of a price cap on Russian oil means countries that sign up to the policy will only be permitted to purchase Russian oil and petroleum products transported via sea that are sold at or below the price cap ($60 a barrel).
DEMAND EXPECTATIONS:
- CHINA REOPENING HAS STARTED (JANUARY 8, 2023): Holiday travel inside China surged 74% from last year after authorities scrapped COVID-19 restrictions. Meanwhile, Gasoline consumption increased over the holiday by 20% from a year ago, with record flows of cars on the nation’s highways. GOLDMAN SACHS ON CHINA OIL DEMAND: OIL DEMAND UP FROM 14.5 MILLION BARRELS A DAY IN NOVEMBER TO 15.5 MILLION BARRELS A DAY IN MID- JANUARY 2023. Demand to rise above 16 million barrels a day in the quarters to come. GOLDMAN SACHS predict China will be reopening in Q2 of 2023. A full reopening case could imply an upside of $15 per barrel. BARCLAYS: China Reopening Could Significantly Tighten Physical Oil Markets, Unlocking 1.5-2 million barrels a day of incremental demand in relatively short order, worth $20/B On Brent. BANK OF AMERICA: Oil could jump 15 dollars with the Fed pivoting and China reopening.
ANALYST OPINION:
- JPMorgan forecasts $90 in 2023. Goldman Sachs predicts $100 by the end of the year. Morgan Stanley Price Target stands at $110 in 2023. UBS forecasts $107 a barrel. Commerzbank targets $100 a barrel. BANK OF AMERICA 2023 FORECAST: Oil at $104 a barrel. Deutsche Bank forecasts $100 in Q1 2023.
DOWNWARD PRESSURE:
- US STRATEGIC PETROLEUM RESERVES (SPR) TO REFILL AT $68 - $72. The Biden administration said they will start buying crude to replenish the strategic petroleum reserve when prices fall to the range between $68- $72 per barrel. President Biden ordered the release of a total of 180 million barrels of crude this year in response to a price rally caused by Russia’s invasion of Ukraine.
- SAUDI ARABIA: Saudi Arabia, de facto OPEC leader, maintains a fiscal breakeven oil price of around $80 a barrel.
Crude Oil, February 10, 2023
Current Price: 79.30
|
Crude Oil |
Weekly |
|
Trend direction |
|
|
100 |
|
|
90 |
|
|
85 |
|
|
74 |
|
|
73 |
|
|
72 |
Example of calculation base on weekly trend direction for 1.00 Lot1
|
Crude Oil |
||||||
|
Pivot Points |
||||||
|
Profit or loss in $ |
20,700 |
10,700 |
5,700 |
-5,300 |
-6,300 |
-7,300 |
|
Profit or loss in €2 |
19,271 |
9,962 |
5,307 |
-4,934 |
-5,865 |
-6,796 |
|
Profit or loss in £2 |
17,064 |
8,821 |
4,699 |
-4,369 |
-5,194 |
-6,018 |
|
Profit or loss in C$2 |
27,780 |
14,360 |
7,649 |
-7,113 |
-8,455 |
-9,797 |
1. 1.00 lot is equivalent of 1000 units
2. Calculations for exchange rate used as of 09:00 (GMT) 10/02/2023
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your
Senior Account ManagerClient Manager regarding their use.
- You may wish to consider closing your position in profit, even if it is lower than suggested one
- Trailing stop technique can protect the profit – Ask your Senior Account ManagerClient Manager for more detail