FXStreet (Delhi) – Nick Mannion, Research Analyst at RBS, notes that persistent oversupply, weak demand and increasing expectations of December Fed rate hike are keeping downward pressure on oil prices.
Key Quotes
“This week marks one year since OPEC ministers first shocked global markets by maintaining output in spite of falling prices, precipitating a further 40% decline.”
“WTI crude oil is currently sitting at key long-term technical support at $40bbl just as we approach OPEC’s critical next meeting on December 4. With Iran’s likely return to global export markets looming, Saudi Arabia is unlikely to risk market share by cutting production.”
“We expect further declines in oil and renewed pressure on oil-dependent FX. Similarly, we expect more pressure on currencies where central banks are most worried about a de-anchoring of inflation expectations: Long USD vs. MYR, NOK and EUR.”
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