Crude oil price: will the Trump-Putin call reverse this crude sell-off?
Crude prices slump yet again, but with Trump and Putin due to speak, could we see crude oil prices reverse course?
Oil prices plunge again
Oil prices have nosedived into another week, with the price moving within touching distance of a multi-year low. The driving force of this decline is obviously a lack of demand, and that has been highlighted yet again after easyJet grounded their entire fleet today.
With many people looking at a potential 3-6 month period of lockdowns in the UK, there is plenty of anxiety that we will see much of the year dominated by a huge lack of global travel.
The theme has been relatively consistent on this market, with short-term downside continuing to dominate despite the prospect of long-term gains.
Trump rues energy price decline
US President Donald Trump is perhaps the most peeved at the recent decline in energy prices, with his insistence that lower prices benefit the economy now giving way to a firm insistence that we need to see higher prices to support US producers.
On the reverse of this coin is Organization of the Petroleum Exporting Countries (OPEC), which has also reversed its role from taking action to support prices to actively driving them lower. With Trump now due to speak to Russia President Vladimir Putin in a bid to break the Saudi-Russia deadlock, some will hope this could be the beginning of a new bullish phase for oil.
However, the trajectory in both WTI and Brent prove otherwise, with both continuing their recent declines. Certainly this phone call could provide a significant bounce if Trump has his way, yet it could also prove to markets that this current standoff is here to stay in the event of a failed attempt to push Putin into a different direction.
For many, Putin’s actions are a direct attack on US interests, and thus it seems unlikely he will simply change course as soon as Trump gets on the phone. Nevertheless, we should expect volatility given the potential implications of this call.
Brent crude technical analysis
Brent has been heading lower yet again today, with the initial gap lower overnight being followed up by further downside. The 15-minute chart highlights the current pattern of lower highs and lower lows, with bearish positions favoured unless we see a break through the $26.66 swing high.
A rise through that point could signal a positive outcome from those talks, with a more optimistic market bias coming into play. Until then, this bearish short-term view looks likely to remain dominant.
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