the daily chartist

Daily market recap for 22.06.2018

published 1 year ago

 Friday was the last day of the annual OPEC meeting, which took place in Vienna. I have covered the Live conference Yesterday and point out some highlights, now I'll just get into more details. Oil woke up after the news that Iran actually agreed to reach a deal with the Cartel to raise production by 1 million b/d on paper, and in reality, 600 kb/d as many of the OPEC nations are already tapped out and unable to produce more. This overall was the scenario on which the committee had agreed Thursday and the plan that was pushed by Saudi Arabia last week. The deal itself wasn't yet formally announced, but this will mean a return of 100% compliance with output quotas. As Bloomberg notes, that everyone's been waiting on that:

 The fear was that, if the meeting broke up in disarray, Saudi Arabia would simply open the taps and other producers would follow suit, unleashing far more supply than the market needed. What this deal does is to bring some order to the process of easing supply restraint.

 With that Iran has submitted with the majority and will comply with the effective Saudi - Russian decision, driven by Trump for the cartel to produce more oil. 

 Bloomberg further added that any distribution of output increase among OPEC and non - OPEC members will create winners and losers. 

While the headline number is what will matter for oil prices, the relative gains and losses against their fellow members will also be important to the participants. That could mean ministers still have a way to go before they are finally done. But the fact that they have got as far as they have means that cohesion has, once again, proved paramount.

 Later in the conference, the deal was done - a 1 million "in writings" production increase, which won't actually be good for the other nations as they peak out on their outputs. OPEC nations comply with output quotas - with the exception of the "real" production increase, which according to Nigeria energy minister will be 700kb/d while earlier reports had it at 600kb/d:

  • SAUDI OIL MIN: `WE HAVE AN AGREEMENT,' DECIDED ON 1M B/D HIKE
  • KACHIKWU SAYS OPEC SIDE TO ADD 700K B/D IN REAL BARRELS
  • SAUDI WILL BOOST OIL OUTPUT, MINISTER SAYS
  • OPEC COMMUNIQUE SAYS GROUP WILL STRIVE TO REACH 100% COMPLIANCE
  • DRAFT OPEC COMMUNIQUE SEEN BY BLOOMBERG DOESN'T GIVE NUMBERS
  • NIGERIA SAYS QUOTAS WERE NOT DISCUSSED IN OPEC MEETING
  • SAUDI MIN: OUTPUT HIKE DEPENDS ON WHICH NATIONS HAVE CAPACITY
  • SAUDI MINISTER: OUTPUT HIKE WILL BE `PROPORTIONAL' BY COUNTRY

  The next full OPEC meeting is scheduled for December 3, Bloomberg is noting that the ministers will hold an important meeting of the Joint Ministerial Monitoring Committee in Algiers in September. This will be a chance for the deal to be reviewed and adjustments to be made. 

 And of course, Trump's response didn't come late:

 

 

Hope OPEC will increase output substantially. Need to keep prices down!

— Donald J. Trump (@realDonaldTrump) June 22, 2018 

 As the news was rolling out, Crude oil went with the positive scenario and climbed steadily up, breaching the 61.8 Fibo, $67 and $68 and $69 as well for a close at $69.31. If the positive outcome stays warm, Oil will continue the green sessions and will try for a move up towards $70. The peak from 22.05.2018 at $72.78 needs to be tested as well. A new higher high will be a proof that the price intends to move up as OPEC and non - OPEC is respecting their deal.

 Moving to Gold, it had a tough week, but Frida it actually closed with a candle that may signal a reversal. Maybe not in the trend yet, but for a correction for sure. The Friday's candle ended with an engulfing Bullish candle pattern after the price bounced back nicely on Thursday from $1261.260. There is a good chance for the price to move again up towards 23.6 Fibo (around 1286.270) where it will take its stand against the Bears with their desire to subdue the price lower. If successfully breached, Gold will try again on $1300 (38.2 Fibo). Gold was supported on Friday by the rally in Crude and with the weaker dollar. Unfortunately, Gold has the "Death Cross" now and may signal bad news only for the metal in the long-term. This will be tested of course and we need to see a confirmation for that scenario. 

 Bitcoin is having a hard time indeed, since the massive sellout from the peak in 18.12.2017, reaching $19419.20. As noted the Coin sits well in a position where it can bounce back and save all the Mooner's money in the cloud mining services and the ones with long-term investments in Crypto. The price continued to fall as a major Japanese exchange halted account creation on their side. The price had its chance on 13.06.2018 and it started well, modest, but it failed on Friday, reaching again the bottom line and now the question is will this attempt be the One that will at least lift some of the pressure with the possibility for the price to move back above $7000. The disturbing thing is that as in Gold, BTC as well in a "Death Cross" (50EMA crosses 200EMA from above), signaling further deterioration of the price movement. On the bottom side, we have 5841.66, 5427.70 and 5100.89 to watch before we start selling our Lambos to have something to eat and somewhere to sleep. People will get out, these points will be the last pressure points because if they fail as well, we are talking here for a sustainable Bearish trend and cycle. Something the Bitcoin and the Crypto markets haven't seen at all. Have in mind that going lower will mean going cheaper on buying BTC or any other Crypto. The ones that missed the rally in 2017 will have a chance for the rally in 2019. (not a typo)