MARKET BRIEFING – LONDON OPEN 16.02.2016
News that the Russian and Saudi Oil Ministers have agreed to hold talks about cutting Oil production later today has sent Light Sweet Crude rallying above the US$31.00 per barrels in early morning trading.
Today’s talks are due to take place in Doha and have been brokered by the Qatari Oil Minister. This closed door event should resemble a poker match between two evenly matched and very competitive players as both participants will do what they can to minimise concessions.
That the Venezuelan Oil Minister will also be in attendance could be positive in pushing the talks to a successive outcome. Venezuela has suffered more than most from the collapse in the price of crude as the Government of this Latin American country struggles to maintain budget obligations. Therefore, it is in its interest to push a deal through.
Although there has been talk of a deal before, this appears to be the first serious meeting between the world’s big two oil producers. The timing of this meeting comes at a crucial juncture in Middle East politics with events in Syria threatening to redraw the geostrategic map.
The Russian military involvement in Syria and a Saudi Arabian threat to intervene military opens up the spectre of an armed clash between these two countries. Therefore, it is rather fortuitous that both the Governments have decided to open up a channel of communication.
The Saudi Government may feel that as it holds the strongest hand might decide that it does not want to comprise by cutting its own production. The Russians, however, have technical issues that restrict its ability cut oil production as the harsh Siberian climate could lead to wells being lost.
An agreement to introduce production quotas will need the Saudi’s to move away from their current policy that requires all producers agree on crude production limits. However with Iran now freed from international sanctions the prospect of increased production from this country will make the likelihood of reaching an agreement a difficult undertaking.
EURUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.1280
Target 2: 1.1025
Projected range in ATR’s: 0.0128
Daily control level: 1.1270
GBPUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.4595
Target 2: 1.4270
Projected range in ATR’s: 0.0162
Daily control level: 1.4530
USDJPY
The intraday technical outlook
Trend 1 hour: Up
Target 1: 116.30
Target 2: 112.85
Projected range in ATR’s: 1.74
Daily control level: 111.60
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9980
Target 2: 0.9755
Projected range in ATR’s: 0.0112
Daily control level: 0.9720
USDCAD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.4000
Target 2: 1.3670
Projected range in ATR’s: 0.0165
Daily control level: 1.3850
AUDUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.7280
Target 2: 0.7070
Projected range in ATR’s: 0.0104
Daily control level: 0.7125
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1230.00
Target 2: 1185.00
Projected range in ATR’s: 22.89
Daily control level: 1245.00
OIL
The intraday technical outlook
Trend 1 hour: Up
Target 1: 32.00
Target 2: 28.00
Projected range in ATR’s: 2.13
Daily control level: 29.00
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