Talking Points:
- Crude Oil[1] prices have held onto their recent gains at the start of the week, even if prices haven’t moved all that much.
- Upcoming US inventory data should help provide more clarity for markets that have been dealing with concerns over supply.
- Recent changes in trader positioning suggest that Crude Oil may still have further gains ahead.
Looking for longer-term forecasts on Oil prices? Check out the DailyFX Trading Guides[2].
Crude Oil prices are off to a slow start this week, mirroring the relatively calm market conditions seen elsewhere. With repositioning taking place ahead of the Easter holiday, market participants are finding themselves at ease over old concerns – mainly that Brexit has been punted to October and that the US-China trade war talks are approaching the endgame.
But the backdrop for Crude Oil prices remains supportive. Despite concerns over growth lingering in Europe[3], strong Q1’19 US growth expectations have shaken off any Fed-induced concerns about an immediate slowdown hitting the world’s largest economy. Coupled with signs that more sanctions are coming down the pipeline for Iran and Venezuela, and now increased fighting in Libya, there are several pieces of evidence to suggest that the supply picture will remain constrained over the next several weeks.
In the near-term, it is worth cautioning that, given commentary from Russian Finance Minister Anton Siluanov that the country may no longer participate in the OPEC production cuts past June, concerns about excess supply may perk up and limit Crude Oil’s advance. Traders will get a more complete picture over the supply picture in the next 24-hours when the weekly API inventory data are
