IEA report beat crude oil bulls! USOIL fell back to $19

Trading Discussion News and Economy
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The production reduction agreement between OPEC and Russia has just been reached for two days, and the international oil price has reached a record low again. USOIL hit a record low of $19.2. The bad news in the crude oil market does not seem to be over.

According to the latest report disclosed by IEA, oil demand in April is expected to decrease by 29 million barrels per day, as to the level since 1995; on April 15, WTI closed at $19.87 per barrel, which is the third time that WTI crude oil futures fell below $20 per barrel since April.

The three hitting bottoms of crude oil feature this month are determined by many factors.

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Firstly, there is no sign of warming up in the Novel Coronavirus Pneumonia. The global market demand caused by the epidemic has shrunk. Serious oversupply of crude oil causes the price of crude oil has been seriously suppressed.

Secondly, the United States, Russia and OPEC are competing for interests. OPEC countries, whose main economic source is crude oil export, will continue to reduce prices and promote sales, in order to take market share.

Day Trading suggestion

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Make long position at current price $24
Target $27

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Well, who needs it now? All production was either reduced or completely suspended. The world at that time was frozen in anticipation of what would happen next. So it’s no surprise. But when it does, it always looks alarming. It’s as if something has happened that could change the order dramatically.

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It is very true that oil lost market at some point due to very many factors. The main factor was abount the corona virus which has really devasitated almost all the sectors. Rememeber, the demand of oil depends on the number of the motors operating at a given time. This is why the lock down dractically led to the decrease of the of the oil prices.

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Oil producing company went a serious loss during the lock down because the motor related vessels were not operating for quite some peiod of time. This forced them to reduce the prices of the oil. There was no one ready to go for any jouney. Infact, some countries went under lock down and they did not allow any vessel from another country to land in their country.