Oil plunged last week after both Saudi Arabia and Russia indicated that they will increase the supply of oil to the market in the second half of 2018.
As the price of oil has increased over the last 12 months more oil producers have entered the market or ramped up their production increasing competition for these big players.
Some of these producers have a minimum breakeven point to make production viable and if Saudi Arabia and Russian can hurt them by pushing the price down temporarily they will happily oblige.
The price of oil fluctuates based on supply and demand. Is this situation Russia and Saudi Arabia have only said they will increase production but have not did it yet.
This is how the market work, traders are pricing in future action and this future action means oil will fall so they sell now.
Add to this the fact that high oil prices pump up inflation and can have a negative impact on global economies. When it costs more to fill a car, consumers have less to spend in the real economy so a cooling of oil prices is welcomed by many.
Join is for our next live webinar on the 5th June by registering below.
|28.5.2018||Oil Prices Plunge|
|21.5.2018||The EURUSD Continues to Fall Further|
|14.5.2018||The S&P 500 Rises on Iran and Fed Statement|
|7.5.2018||Is the EURUSD pair heading towards 1.1550?|
|30.4.2018||Sterling Gets Hammered Again|
|23.4.2018||Sterling Gets Crushed on Weak UK Data|
|16.4.2018||Is Oil Heading for $80?|
|9.4.2018||The NFP Aftermath - GBPUSD Reins Supreme|
|26.3.2018||Trade of the Week – USDJPY|
|19.3.2018||Trade of the Week – Crude Oil|
|12.3.2018||Trade of the Week – Ethereum|
|5.3.2018||Trade of the Week – The Dow Jones|
|27.2.2018||Trade of the Week – GOLD|
|19.2.2018||Trade of the Week – USDJPY|
|12.2.2018||Trade of the Week – Crude Oil|
|5.2.2018||Trade of the Week – Sell the Dow Jones|
|29.1.2018||Trade of the Week – EURUSD|
|22.1.2018||Trade of the Week – GBPUSD|
|16.1.2018||GBPUSD surges by over 200 pips on Friday|
CM Trading is the Brand name of Global Capital Markets Trading
The website is operated by CMT Processing Limited.
HIGH RISK WARNING:
Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.
© Copyright 2015 - CM Trading - All rights reserved