Site map
العربية Български 中文 Čeština English Français Deutsch हिन्दी Bahasa Indonesia Italiano Bahasa Malay اردو Polski Português Română Русский Srpski Slovenský Español ไทย Nederlands Українська Vietnamese বাংলা Ўзбекча O'zbekcha Қазақша

InstaForex Client Area

  • Personal settings
  • Access to all InstaForex services
  • Detailed statistics and reports on trades
  • Full range of financial transactions
  • System of managing several accounts
  • Maximum data protection

InstaForex Partner Area

  • Full information on clients and commissions
  • Graphic statistics on accounts and clicks
  • Webmaster instruments
  • Ready-made web solutions and wide range of banners
  • High data protection level
  • Company's news, RSS feeds, and forex informers
cabinet icon

InstaForex – always at the forefront!Open a trading account and become a part of the InstaForex Loprais Team!

Success history of the team headed by Ales Loprais can become your success history! Trade confidently and head towards leadership like regular participant of Dakar Rally and winner of Silk Way Rally InstaForex Loprais Team does it!

Join in and win with InstaForex!

Instant account opening

Get a letter of instructions
toolbar icon

Trading Platform

For mobile devices

For trading via browser

Long-term review

Pessimistic forecasts by the International Energy Agency caused Brent to collapse to the lowest levels since December 2018, however, the confident pace of global stock indices sowed serious doubts in the minds of investors about the damage to global oil demand. It is possible that we are talking about delaying demand, rather than destroying it. In the second quarter, China and the entire black gold market will return to normal life. Is there too much optimism about the coronavirus, which is most likely still at its peak?

According to the IEA, global oil demand in January-March will decrease by 435,000 b/d. This is the first decrease in the indicator since 2011. The forecast for the aggregate indicator for 2020 was reduced from 1.2 million b/d to 825,000 b/d. Citigroup estimates that demand for black gold from China may decrease by 3.4 million b/d in February and by 1.5 million b/d on average in the first quarter. These figures are a real disaster for the black gold market, while the modest decline in forecasts from OPEC (-400 b/d) looks like an attempt to give wishful thinking.

Forecasts for global oil demand

Exchange Rates 18.02.2020 analysis

Perhaps investors understand that they have overdone the sales. By the end of the week to February 11, speculative net longs for Brent fell by 20%, for WTI - by 7%, and Goldman Sachs lowered its estimate of the average price for each of the two main varieties by $10 per barrel. In the end, the behavior of global stock indices does not indicate a crisis, but rather the well-being of the world economy. The faster the victory over the coronavirus is achieved, the faster the global demand for black gold is restored, the higher the chances of a rebound in Brent and WTI. Especially when OPEC reduces production.

The multidirectional dynamics of oil and the S&P 500 create a favorable ground for the strengthening of the US dollar, which, as a safe-haven asset, usually increases during periods of uncertainty and various kinds of shocks. As a result, black gold has another driver of the decline, which makes the bears' positions even less stable than before. If we add to this the growth of US oil reserves in the week to February 14 by 7.5 million barrels, which is more than twice the forecasts of Bloomberg experts, then the current short-term correction begins to look too weak to count on its continuation.

Technically, after Brent quotes reached the target of 113% to the red "shark" pattern, the probability of a pullback to the levels of 23.6%, 38.2% and 50% of the CD wave increased. The bulls managed to break through to the first resistance at $57.5 per barrel very quickly, but the upward movement did not receive a new impulse. A breakout of an important level will increase the risks of a correction to $60.15, $61.45 and $62.35. On the contrary, if the current resistance remains under the control of the bears, the chances of activating the 5-0 pattern and restoring the downward trend will increase.

Brent, the daily chart

Exchange Rates 18.02.2020 analysis

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Performed by Marek Petkovich,
Analytical expert
InstaForex Group © 2007-2020
Benefit from analysts’ recommendations right now
Top up trading account
Get a bonus from InstaForex

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.