World crude oil prices continue to fall. Monday (Nov 14) as of 19:04 West Indonesia Time, the price of WTI crude oil contract for delivery in December 2016 on the New York Mercantile Exchange fell 1.22% compared to last Friday's closing price to US$ 43.26 per barrel. In fact, earlier this month the price of oil was still US$ 46.86 per barrel.
Finex Futures analyst Nanang Wahyudin said, fundamentally, oil prices are currently under pressure. Understandably, oil production flooded the market. Iran reported its oil production last October increased to 3.92 million barrels per day.
Iraq also reported an increase in production in October by 215,000 barrels per day to 4.77 million barrels per day. As a result, OPEC production in October 2016 was raised by 236,700 barrels per day to 33.64 million barrels per day. This increase clearly puts significant pressure on prices, especially since there has not been a large absorption of oil demand in the market.
Analysts predict oil prices today Nov (15) will still fall. Moreover, the Baker Hughes report said active US crude oil drilling rigs last week rose by two units to 452 rigs. This increase in the number of active rigs could lead to an increase in US production.
OPEC will meet on November 30 to discuss the production cut deal. Nanang's calculations, to provide a balance to the current price, at least OPEC must cut production by around 640,000-1.1 million barrels per day. If there is no agreement later, the price of oil will decrease further. According to Research & Analyst Asia Tradepoint Futures Deddy Yusuf Siregar, if the cut plan fails, oil prices could fall below US$ 40 million per barrel.
Don't forget, the oil will also be affected by the Fed's policy on interest rates. If the Fed's interest rate rises, the impact on oil prices will be negative. Moreover, the policies of the latest US President, Donald Trump, are predicted to still benefit the USD position. Fortunately, the Energy Information Administration (EIA) predicts oil production of non-OPEC countries will fall by 900,000 barrels per day this year. From the technical side, Deddy analyzes that oil will still move below 50 MA, 100 MA, and 200 MA.
MACD line is also moving in the negative area. Meanwhile, the stochastic and RSI are in the oversold area. Oil is still showing a bearish trend. Deddy predicts that today's oil will move in the range of US$ 40.25-US$ 42.60 per barrel. Nanang predicts that oil prices will move between US$ 39.00-US$ 45.00 per barrel in the next week.
Kontan, Page-7, Tuesday, Nov 15, 2016
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