[null, {"document_url": "https://www.cmcmarkets.com/en-nz/news-and-analysis/oil-bounces-as-saudi-ready-to-cut-output", "unformatted_src": "https://assets.cmcmarkets.com/images/oil_2_new_medium.jpg", "src": "https://assets.cmcmarkets.com/images/oil_2_new_medium.jpg", "formatted_filename": "oil new medium"}, null, {"document_url": "https://www.cmcmarkets.com/en-nz/news-and-analysis/oil-bounces-as-saudi-ready-to-cut-output", "unformatted_src": "https://assets.cmcmarkets.com/images/ChartSG_2018.11.12.png", "src": "https://assets.cmcmarkets.com/images/ChartSG_2018.11.12.png", "formatted_filename": "ChartSG"}, null, {"document_url": "https://www.cmcmarkets.com/en-nz/news-and-analysis/oil-bounces-as-saudi-ready-to-cut-output", "unformatted_src": "https://assets.cmcmarkets.com/images/margaret_yang_small.jpg", "src": "https://assets.cmcmarkets.com/images/margaret_yang_small.jpg", "formatted_filename": "margaret yang small", "alt_text": "Margaret Yang Yan"}, null]


Oil bounces as Saudi ready to cut output

14:00, 12 November 2018 · By Margaret Yang Yan Crude oil prices advanced on Monday morning following Sunday’s news that Saudi Arabia is planning to slash oil output by half a million barrels a day in the coming months in an attempt to boost price.

The country’s energy minister said they are seeing a tapering off at year-end, a comment that reverses their earlier commitment to reduce output under the pressure from US President Trump. Saudi also raised concerns over softening demand for energy as global economy cools, which causes oversupply in the market.

Energy and resource sector pulled global equities lower on Friday as Brent Crude oil price dived below $70 per barrel and reached six-month low on renewed concerns over global oversupply. Several key factors, including waiver of several of Iran’s largest importers from US sanctions, continued increase in US output and a weaker demand outlook amidst escalating trade spat, weighing on oil prices. Recent news that Iraq is closing in on a deal to resume Kirkuk oil exports, which would potentially add 0.4 million bpd on global output, adding on glut concern.

Falling crude oil price has affected Singapore’s stock market in a negative way, hurting its oil & gas industry, offshore & marine sector and the lenders due to their large exposure to the oil-related business. Sembcorp Marine, Keppel Corp, Sembcorp Industry and banks were part of those vulnerable against falling oil prices.

Technically, Brent crude price is riding a bearish trend with both of its 10-Day SMA and SuperTrend (10 2) sloped downwards. Momentum indicator MACD and DMI has yet to give early reversing signal yet. Brent has come to its 161.8% Fibonacci Extension level at 69.45 area, with its next support level potentially found at around 66.51 area (200% Fibonacci Extension). Momentum indicator RSI has dived deeply into oversold territory below 30%, as the bearish trend is strong.

Week ahead:

Crude Oil Brent – Cash