Crude Oil recap for 16.11.2015
WTI according to the Iranians has priced in their Oil output as mentioned by the Iranian Oil Minister Zanganeh:
- Markets have anticipated the increase in Iranian oil exports
- increase in exports will not cause price to fall
Contrary on his statement Oil started falling from 48.97 after a short correction from 43.77. As mentioned before 44.43 was very important level to watch as the price found support there, but with the influx of fresh Oil, finally the natural laws of supply and demand prevailed and the price moved lower breaking the level. It seems though the price in the short term may hover around the current level of 41-40 before a steady bearish push towards 40 and under it for the run to 39.51. If a correction occurs for a bearish momentum, price will go up to 43.44 and 44.43 as there it will meet resistance.
We have to have in mind that the Saudis are experiencing economic difficulties with these current oil prices and we'll see how much "the knife can push in" and when they (and everyone else in OPEC) will blink first to release some of the pressure. As this is on the economic side predicting stagnation for the countries in OPEC, on the "possible all-out war" side we have the very real possibility now after the tragic events in Paris last week for boots on the ground from the French and their allies after they started bombing ISIS targets. If Oil markets awakens from the low price limbo and reacts naturally to the real threat for the energy pools in the area, the price will heavily spike up and OPEC may not be able to control the surge if it wants to hold on its current Oil policy.
So for now the price is heading lower in perspective. Still keep in mind risks of sudden and unexpected OPEC decisions about their policy regarding the Oil production or if all Hell brakes loose in the region.