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US Crude Slides, Recovers after Doha Meeting Ends in Disarray

US crude futures started the Monday session with losses, but have reversed directions and are showing gains in North American trade. US crude is trading at $39.24 per barrel. Brent crude futures are trading at $42.11, as the Brent premium has increased to $2.87. In economic news, the meeting of oil producers in Doha, Qatar ended without an agreement. In the US, the NAHB Housing Market Index was unchanged at 58 points, within expectations. On Tuesday, the US will release Building Permits, a key indicator.

There was plenty of press and speculation ahead of the oil producers meeting in Doha on Sunday, but the gathering ended in disarray, without any agreement being reached by the OPEC and non-OPEC participants. There was some hope that the parties might agree not to exceed current production levels, but hopes for even this limited move were dashed when Saudi Arabia insisted that any agreement had to cover Iran. When this didn’t materialize, the participants, comprised of OPEC and non-OPEC members, went home. The failure of the talks could severely undermine the credibility of oil producers, and the huge oversupply of crude could worsen if Saudi Arabia and other suppliers decide to increase output. US crude oil prices reacted sharply to the meeting,  [1] In the Asian session, crude plunged 5 percent but has since recovered, and currently showing gains on the day.

The US economy continues to expand, but there are some weak spots, such as the manufacturing industry. US manufacturers continue to face stiff competition with countries that pay much lower wages, such as China, India, and other Asian countries. With turbulent global economic conditions leading to weaker demand, the manufacturing sector is facing additional challenges. There was some positive news on Friday, as the Empire State Manufacturing Index climbed 9.6 points in April, crushing the estimate of 2.1 points. It was the indicator’s highest level since January 2015. We’ll get a look at the Philly Fed Manufacturing Index, a key manufacturing report, on Thursday. Meanwhile, the UoM Consumer Sentiment dropped to 89.7 points in April, short of the estimate of 91.9 points. Although consumer sentiment remains high, this marked the first time since September that the indicator fell below the symbolic 90 level.

WTI/USD Fundamentals

Monday (April 18)

Upcoming Key Events

Tuesday (April 19)

*Key events are in bold

*All release times are DST

WTI/USD for Monday, April 18, 2016

WTI/USD April 18 at 10:10 DST

Open: 38.14 Low: 38.04 High: 40.36 Close: 39.24

WTI/USD Technical

S3 S2 S1 R1 R2 R3
32.22 35.09 37.75 40.00 43.45 46.69

Further levels in both directions:

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [5]

Market Analyst at OANDA [6]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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