The price of crude settled higher in the global economy prior to the market closing in the last week securing two consecutive week gains in the global economy. There has been an ongoing crisis in the energy field due to the excess supply of oil in the market which exceeds the current demand line to a great extent. Most of the leading oil investors are now little bit relief as the price has hover higher in the global market but the strong bearish threat in the oil industry has not yet been wiped out as strong resistance lines cluster ahead in the market. The oil cap production program has been successful to a great extent as the price of oil has rallied higher after hitting the critical low in the market after their decisions. Most of the leading oil producing countries like Saudi Arabia and Kuwait has already limited their current oil production rate to bring stability in the energy field. According to the leading oil researchers in the global economy, the price of oil might aim towards another bullish rally in the global market but for that, the market needs an active catalyst to refuel the oil bulls in the global economy.
Consecutive week gain in oil price:
In the last week the price of crude settled higher in the global market after the U.S government initiated their cruise missile attract against Syria. However, the number of active oil rigs in the U.S economy is still giving a strong headache to the oil investors as active production from the active oil rigs will create the oversupply problem of oil in the global economy. In the year 2016, USA had only 12 active oil rigs but within a span of 12 months, the number of active rigs is now exceeding more than 672 in the global market. The price of crude oil settled higher in the New York Mercantile exchange, securing a gain of 54 cents and traded at $52.24 a barrel. On the other hand, the price of Brent gained near about 29 cents in the global economy in the London’s Intercontinental Exchange and traded at $55.17 a barrel. Most of the leading investors in the global economy made a decent profit in the last two weeks by trading online account in the oil market. However, the professional investors are now overly cautious as there is a strong chance of bearish retreat since the price is hitting critical resistance level in the market.
Oil rigs in the USA:
The energy field was suffering from extreme level of bearish pressure in the global market from the very beginning of the year 2016 as most of the leading oil producing countries were producing extensively more than the current supply of the global economy. Due to an extensive supply of oil in the global economy, the price of oil was sharply falling in the global market breaking consecutive support levels in the market. However, during the last part of the year 2016, OPEC took a drastic action in the global economy to stabilize the price of falling oil and such drastic action by OPEC member has not been since 2008.In the last OPEC meeting, a proposal for the extension of the oil cap program was suggested by the leading oil producing countries and if OPEC puts restrictions in the oil production with strict guidelines then we will see a sharp rise in the price of oil in near future. On the other hand, OPEC has also noted the rising number of active oil rigs in the USA which currently exceeds more than 672.However, the U.S government has stated that they will strictly follow the guideline imposed by OPEC so that the current oversupply problem is exaggerated in the market.
The sentiment of leading oil producers:
Most of the leading oil producing countries in the world have well appreciated OPEC decision and they have already started to act to bring stability in the energy field. However, countries like Iraq is still producing excessive oils and this has been fueling the current oversupply problem of the oil industry. But they have stated that they will also limit the current production of oil in the global market and will become an active participant by following the rules imposed OPEC to stabilize the energy field. A country like Russia has already stated in the last November that they will cut their oil production to 1.8 million barrels per day (bpd) in order limit the oversupply problem in the global economy. Countries like Saudi Arabia and Kuwait has already limited their current production rate much more than they promised and this has levitated the strong bearish pressure in the price of oil. According to the leading economist in the world, the price of oil might find extensive support in the near future but for that, all the leading oil producing countries must limit their current production rate of oil as per OPEC guideline.
The price falling price of oil is greatly stabilized in the global market after OPEC took drastic action in the last year regarding the oversupply problem in the global economy. On that event of most of the professional oil, investors made a decent profit in the global market by riding the bullish rally. The upcoming week is going to play a major role in the global market as most of the professional oil investors are looking for a clear breakout of the current resistance level in the market.
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