Maybe you currently – or even global – traders wondering when will crude oil price drop will end? The following are some of the things you need to know before the decisive step in crude oil transaction.
Venezuela's emergency economic
Among all the country's oil producers, Venezuela is the most viable to lobby the leaders of other countries to match the level of oil production. Petroleum Minister of Venezuela, Eulogio del Pino, had flown from Moscow to Riyadh and Doha to try to persuade officials there to do something for the sake of stabilizing world oil prices.
If we look at the economy of Venezuela in General, we will be able to understand why Venezuela is so eager to reach an agreement. Crude oil holds a share of 95% of Venezuela's exports sector and 25% of the total GDP (GDP). This means that Venezuela will feel safer and happier if world oil prices traded above $ 100 per barrel and – of course – not if the price of oil was in the price range ($ 26-30/barrel).
At the beginning of this year, the President of Venezuela has declared an economic emergency status, because the country's economy has experienced a shrinkage in eight quarters in a row. Economists predicted that Venezuela would calm down if oil prices go back at least to the range of $ 115/barrel, the new break-even level only.
Venezuela's emergency economic
Among all the country's oil producers, Venezuela is the most viable to lobby the leaders of other countries to match the level of oil production. Petroleum Minister of Venezuela, Eulogio del Pino, had flown from Moscow to Riyadh and Doha to try to persuade officials there to do something for the sake of stabilizing world oil prices.
If we look at the economy of Venezuela in General, we will be able to understand why Venezuela is so eager to reach an agreement. Crude oil holds a share of 95% of Venezuela's exports sector and 25% of the total GDP (GDP). This means that Venezuela will feel safer and happier if world oil prices traded above $ 100 per barrel and – of course – not if the price of oil was in the price range ($ 26-30/barrel).
At the beginning of this year, the President of Venezuela has declared an economic emergency status, because the country's economy has experienced a shrinkage in eight quarters in a row. Economists predicted that Venezuela would calm down if oil prices go back at least to the range of $ 115/barrel, the new break-even level only.
The four countries decided to maintain its production
The Venezuela's efforts to fruition, although not as expected. At the very least, the persistence of Venezuela responded with the merging of the Member countries of OPEC and non-OPEC in a negotiation. The emergency meeting is attended by Iran, Algeria, Nigeria, and Ecuador on the weekend to another. Then three days ago Russia, Venezuela and Qatar also participated to the negotiating table. Unfortunately these negotiations are not successful resulted in a solid deal.
So far, Saudi Arabia as the "oil King" is still being stubborn with refuse trimming production. Some analysts argue that the Saudis seemed more interested in regaining their market from competitors. Understandable because world oil prices are still far above the cost of production is their oil. The fall of oil prices is very allowing competitors to come out of the rink. Unfortunately, the fact that happens not to like it.
Then the news comes up again to make the price of oil had rectified on 16 February 2016. Qatar, Venezuela, Russia and Saudi Arabia have agreed to maintain their oil production in the same numbers with the amount of production in January. It is certainly Dim the hopes of trimming a massive production.
Iran decided not to participate in the deal, so still a bit gives hope meredanya an oversupply of crude oil in the world. Currently, the world is still experiencing an excess supply of between 1 to 2 million barrels per day.
Technical basis, oil prices are still in downtrend
While meetings and speculation regarding the likelihood of achievement of a deal among oil producers are still ongoing, quite technical oil price remains in downtrend for the medium term.
The above graph represents the movement of the price of oil per barrel in the time-frame of the H4. Since October 2015 to date (February 19, 2016) oil prices are seen moving in downtrend. Indeed prices have managed to penetrate upward trendline down looks, but there are still visible in the area of technical resistance range of $ 34.80. There is a possibility of strengthening world oil prices will be held first in the area.
Crude oil price new possibilities will continue strengthening if resistance in the translucent 34.80, with advanced reinforcement to the target kisran 38.35 to the medium term.
Crude oil price new possibilities will continue strengthening if resistance in the translucent 34.80, with advanced reinforcement to the target kisran 38.35 to the medium term.