Once again, a tweet of Donald Trump was enough to generate a huge speculative move on the markets, with oil the asset in question this time. Speculation about the possibility of a deal between Russia and Saudi Arabia, also involving the US, saw the oil price jumped rapidly from $21.50 to $27, before slowing down to $25. Investors are expecting something to happen, even if frankly speaking the deal doesn’t seem immediately possible and at this stage seems more like speculation than something likely to happen quickly. And this is the key point as the oil market needs something to happen as soon as possible to rebalance the shock that is happening on markets with two black swan events at the same time: coronavirus and a missing OPEC deal.
In other words, unless something real (and not only rumours) is agreed, the risk is that the barrel will slow down again in the next few days after this quick and impressive rally.
Chief analyst at ActivTrades and technical analyst for Italian newspaper 'La Stampa'. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a weekly commentator for CNBC Italy and a columnist for La Stampa. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a 250-pages book on gold and the gold market, followed in 2018 by a new updated edition.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.